U.S. Imposes 50% Additional Tariffs on Numerous Canadian Products, Invoking Century-Old Law

Automobiles, Wine, Dairy Products Worth $20 Billion

USMCA Duty-Free Items Also Included

Section 338 of the 1930 Tariff Act Invoked


Canadian Prime Minister: "Accelerate Trade Talks with the U.S."

Industry Urges Negotiations.

U.S. President Donald Trump has decided to impose an additional 50% tariff on a wide range of Canadian products, totaling approximately 30 trillion won. The United States cited Canada’s discriminatory treatment of American-made products as its reason, referencing a legal provision that has not been invoked in a century. With the U.S. launching aggressive tariff measures against Canada just a week after taking similar action against Brazil, South Korea is also on high alert.

According to the White House, on July 20 (local time), President Trump signed three proclamations imposing an additional 50% tariff on Canadian goods such as automobiles, wine, whiskey, dairy products, hockey sticks, cement, honey, and down jackets, citing Canada’s discrimination against American products. These measures also include items that had previously been exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). The U.S. Trade Representative (USTR) stated that the affected products are worth a total of 20 billion dollars (approximately 29.5 trillion won). Products that are already subject to tariffs under Section 232 of the Trade Expansion Act—such as energy, seafood, and critical minerals—are excluded. The new tariffs will take effect in 30 days.

Tariffs Leveraged Using Section 338 for the First Time in 96 Years

U.S. President Donald Trump is answering reporters' questions at Andrews Joint Base on the 19th (local time). Photo by AP Yonhap News

The White House cited Section 338 of the Tariff Act of 1930 as the legal basis for these new tariffs. This provision authorizes the United States to impose up to a 50% tariff on imports from countries that discriminate against U.S. commerce. According to Bloomberg, Section 338 is being used as the basis for tariff imposition for the first time in history.

The Trump administration explained that the new measures are a response to Canada’s discriminatory policies targeting American products. Due to Canada’s imposition of tariffs and bans on the sale of American products, Canada’s imports of American automobiles have decreased by 22% year-on-year over the past year from April, and imports of American alcoholic beverages have declined by 81% over the past year from March. Furthermore, the U.S. government pointed to Canada and China as among the few countries that have retaliated against President Trump’s tariffs.

Some experts interpret this as an attempt by the United States to gain the upper hand in subsequent negotiations for the USMCA, which failed to renew automatically due to U.S. refusal. Earlier this month, the Trump administration announced its intention to reject the existing automatic renewal of the USMCA and committed to reviewing the agreement annually for up to 10 years. That the new tariffs include a 30-day grace period before implementation is also seen as negotiation leverage. According to Canadian Broadcasting Corporation (CBC), Candice Lang, President and CEO of the Canadian Chamber of Commerce, expressed concern over the new tariffs and urged both sides to "use the next 30 days before the tariffs take effect to advance formal negotiations."

The Canadian government has not yet announced an official position. However, this additional round of tariffs could signal intensifying conflict between the United States and Canada, which accelerated after the start of President Trump’s second term last year. Doug Ford, Premier of Ontario, called for retaliatory measures on social media, declaring, "Canada should respond tariff for tariff, dollar for dollar" if the U.S. moves forward with its tariffs.

Global Tariff Deadline Approaching on the 24th... Tension Worldwide

Aerial view of the export terminal in Delta, Canada. Photo by AP Yonhap News

South Korea, too, is now facing heightened tariff uncertainty. The 10% global tariff imposed by the Trump administration in February—based on Section 122 of the Trade Act—will expire on the 24th. Therefore, it has been anticipated that the Trump administration will mobilize alternative legal bases, such as Section 301, to maintain tariffs. Section 301 allows the executive branch to investigate unfair trade practices by other countries and impose retaliatory tariffs and other sanctions.

The USTR already announced on the 2nd of last month plans to impose an additional 10% or 12.5% tariff on imports from 60 economic regions under Section 301. South Korea has been included in a group of 46 economic regions, along with Japan, China, Australia, and others, that will be subject to the 12.5% tariff. This group comprises countries the U.S. considers to have failed in both introducing and effectively enforcing import bans on goods produced with forced labor. The USTR is currently seeking input and continuing consultations with relevant governments around the world.

Brazil was the first country to be targeted by the U.S. under these Section 301-based tariffs. On July 15, the U.S. government announced it would impose a 25% tariff on some products from the 22nd, citing concerns about unfair trade practices. The Brazilian government interpreted this as "political oppression" against its country and signaled retaliatory tariffs against the U.S. just one day later on the 16th, though the specific products and rates have not yet been disclosed. According to The Guardian, however, rather than imposing tariffs on U.S. imports, the Brazilian government is considering non-tariff measures to avoid raising prices for local consumers, such as suspending patent rights for U.S. pharmaceutical and agricultural seeds, restricting remittances of profits by U.S. audiovisual companies, and reopening dispute procedures at the World Trade Organization (WTO).

Meanwhile, the Trump administration is also using tariffs as a tool for incentives that suit its interests. On this day, President Trump signed a proclamation reducing the current 50% tariff on aluminum imports by half, provided that manufacturers establish new production facilities or expand existing ones in the United States. Since last year, the Trump administration has imposed tariffs on steel, aluminum, automobiles, and auto parts based on Section 232 of the Trade Expansion Act.

President Trump stated, “(Secretary of Commerce Howard Lutnick) has determined it is crucial to modify the U.S. aluminum tariff system to encourage an expansion of primary aluminum production in the United States,” stressing that domestic supply is not meeting demand. He added that aluminum is an "essential resource for the U.S. economy and national defense industry." Given that President Trump invoked "the defense industrial base," the ongoing war in the Middle East since the end of February may also have influenced this policy shift.

This content was produced with the assistance of AI translation services.