Canada is bracing for a fresh round of 50 per cent tariffs on some of its goods entering the United States, as negotiations between both countries remain far from reaching an agreement.
The new tariffs, which are expected to take effect on Wednesday, will affect nearly $20 billion worth of Canadian products, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.
US President Donald Trump invoked Section 338 of the US Tariff Act of 1930 last month to impose the duties on selected Canadian imports. The law allows the US president to impose tariffs of up to 50 per cent on goods from countries considered to be discriminating against American products.
Canada and the US are still trying to resolve their differences, with Canada’s minister responsible for US trade relations, Dominic LeBlanc, and chief negotiator Janice Charette holding talks with American officials in Washington.
However, LeBlanc told an advisory committee last Friday that both sides were still far apart on a possible trade deal.
The latest tariffs are also raising concerns among Canadian businesses, particularly small and medium-sized firms that depend heavily on access to the US market.
Alain Ouzilleau, owner of Canadian kitchen cabinet manufacturer Cabico Ltd, said a 50 per cent tariff would be difficult for manufacturers to absorb and could make some Canadian products too expensive for American buyers.
The Canadian Federation of Independent Business also warned that the tariffs could lead to significant disruption for small businesses that rely on American customers and suppliers.
Canada’s wood products and wine industries are among the sectors expected to feel the impact, with some businesses already struggling due to other economic challenges.
The tariffs would also apply to products that qualify for preferential treatment under the US-Mexico-Canada Agreement (USMCA), increasing uncertainty for Canadian exporters.
Trump last month also declined to extend the USMCA for another 16 years, instead subjecting the trade agreement to annual reviews.
Trade experts said the bigger concern is that the latest tariff dispute could further complicate negotiations over the future of the USMCA.
US Trade Representative Jamieson Greer has held several meetings with LeBlanc as both countries race to reach an agreement before Wednesday’s deadline.
Among the major sticking points are Canada’s dairy system and restrictions on the sale of US alcohol in some Canadian provinces.
The dispute comes as Canada and the US remain deeply connected economically, with Canada being America’s second-largest trading partner after Mexico.
