Trump Slaps 50% Tariff on Canada, Threatens More

Canada's Prime Minister Mark Carney (Reuters)
Reuters
By Michael Rainey

Good evening. Dispensing with hopes for a quiet final week of summer, the Trump administration ramped up conflicts with Iran and Canada today, as Treasury Secretary Scott Bessent announced a new financial offensive against Iran and President Trump threatened another round of tariffs against one of our largest trading partners. Details below.

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Trump Slaps 50% Tariff on Select Canadian Goods, Threatens More

The Trump administration imposed 50% tariffs on about $20 billion worth of Canadian products on Saturday following the collapse of trade talks between the United States and its northern neighbor. The move affects a motley assortment of goods, including plywood, alcohol, wigs and dairy products.

President Trump said last week that the two countries "have a DEAL!" raising hopes that the North American economic giants, whose supply chains are deeply entwined, were close to an agreement to lower trade barriers. But those hopes were dashed ahead of a midnight deadline Friday, and Trump imposed tariffs that he first threatened last month, claiming that Canada is treating the United States unfairly in its trade practices. Trump has also nursed a grudge against Canada for rejecting his idea of becoming the 51st state and for allowing wildfire smoke to blow into the United States.

On Monday, Trump threatened more tariffs, saying he plans to impose 50% import fees starting January 1 on a wider variety of Canadian goods, including automobiles, trucks and steel.

"Canada has been ripping off the United States of America for years," Trump said on his social media platform. "Canada will be treated like a State no longer! On Trade, and in other ways, also, they are among the worst Nations in the World to deal with."

Dueling narratives: U.S. Trade Representative Jamieson Greer said Saturday that the Trump administration had made a number of significant concessions in the talks, including an offer to eliminate a 10% tariff on softwood that the president imposed last year. The United States also proposed cutting a 25% tariff on vehicles to as low as 7%, and a tariff on steel and other metals, currently 50%, would have been cut in half.

Canadian Prime Minister Mark Carney, who walked away from the talks just hours before the deadline, offered a very different version of events. The Canadian leader said the Trump administration sought to use "economic integration as a weapon" and that, in the end, the United States "asked too much and offered too little."

Among other things, the U.S. negotiators were seeking to influence Canada's ability to make third-party trade agreements, and to require Canada to closely mirror the policies of the United States toward other countries. They also wanted to roll back Canadian rules governing the use of the French language, and to gain priority access to Canadian energy supplies.

Carney said he planned to respond to Trump's aggressive tactics and vowed to match the U.S. tariffs dollar for dollar, starting on September 8.

"You're at war when you're attacked, and we got attacked," Carney told reporters at a press conference over the weekend. "We cannot accept what they've offered and we will not give what they've asked."

Polls suggest that a majority of Canadians agree with the combative stance taken by Carney, with 76% of respondents saying they support his decision to walk away from the talks.

Less diplomatically, Ontario Premier Doug Ford responded to Trump's threatened tariff on vehicles next year by saying he can "kiss my ass," while calling on Canadians to fight back.

"We need to throw everything in the kitchen sink at him," Ford said in an interview, referring to Trump. "He's arrogant, he's cocky, and you know, as Ronald Reagan said, if you come to a draw with a bully, what stops that bully from coming after you the next day and the next day. And that's all Donald Trump is - a bully. Well, he's going to have a rude awakening."

Economic jitters: Trump insists that the United States can do without Canada, saying on social media, "WE DON'T NEED CANADA, THEY NEED US!" But economists note the deep and complicated economic ties between the two countries, and the potential for harm if those ties are severed.

Brad Setser, a senior fellow at the Council on Foreign Relations, said the tariffs on vehicles produced in Canada would almost certainly hurt U.S. companies, given how tightly integrated the auto industry is. "Hard to believe that the US can sustain 50% tariffs on cars imported from Canada while tariffs on Korean, Japanese and European cars are at 15% -- Canadian cars/ trucks have a lot of US content, so this has a direct cost to the US economy," he said on X. "So this is quite bad for 'Detroit' -- both metaphorically and literally. It hurts Michigan's economy, and one assumes, doesn't do the Republican candidate for Senate in Michigan any favors."

Republican Sen. Susan Collins of Maine said the tariffs would hurt companies and workers in her state. "Ever since the tariffs were first announced, I have heard from many businesses, farmers, and lobstermen concerned about the cost of navigating the tariffs, the lack of domestic supply chains, and the likely imposition of retaliatory tariffs by Canada," she said, per The Hill. "I urge both sides to return to the negotiating table."

New York Gov. Kathy Hochul also criticized the tariffs, saying they make goods less affordable. "Needlessly picking fights with our allies and raising prices here at home," Hochul said, per The Guardian. "That's Trump's economic policy in a nutshell."

Quote of the Day #1: 'Economic D-Day'

"This is a sustained campaign to collapse every last option for Iran. The campaign we begin today will gather force with every day that follows, and it will not end until this regime stands alone."

  • Treasury Secretary Scott Bessent, announcing on Monday what he said is an intensification of the U.S. economic war against Iran, with the goal of isolating the country from the rest of the world.

Bessent's announcement, though, was light on details and greeted with skepticism by some analysts. "The Trump administration has billed the effort as the coming of an economic apocalypse for Iran," said The New York Times. "But the announcement on Monday did not make clear how the measures would further disrupt Iran's economy or whether they would be severe enough to get Iran to end its nuclear program and allow oil to move freely through the Strait of Hormuz."

Daniel Tannebaum, a senior fellow at the Atlantic Council, told the Times that it's not clear that Bessent's plan will have much of an effect. "Until we see actions against more meaningful countries and companies continuing to trade with Iran, it's just words," he said.

Quote of the Day #2: National Guard Blues

"I don't want to think about the National Guard. I don't want to necessarily discuss my affiliation with the National Guard. I don't want to fulfill my normal National Guard duties just because of the abuses of the National Guard in this D.C. mission."

  • An unnamed National Guard soldier, speaking to NPR about their deployment in the nation's capital as part of President Trump's D.C. Safe and Beautiful mission.

NPR interviewed some of the troops who have been stationed in Washington and found that many are skeptical about the purported mission, which involves responding to a supposed "crime emergency" in D.C. "Now, with it being a year, it's hard to feel like that justification holds any water," said one guard member. "It feels like the guard is being exploited in a sense."

One soldier said the deployment felt like a political stunt, while another said, "I will say very frankly that the bad taste that this mission left in my mouth, it actually embarrasses me to be involved in any way."

The troops, now numbering about 4,600, are expected to stay in Washington for the remainder of Trump's term. A recent Pentagon report indicates that maintaining 2,500 troops in Washington over the next two years will cost an estimated $1.4 billion.

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