Like higher prices? Trump will deliver.
Untested Section 338 of the Tariff Act of 1930
If rising oil prices were not enough, factor in 50 percent tariffs on Canada.
Please note the latest bit of tariff insanity by Trump. The New York Times explains Trump to Impose 50% Tariff on Many Canadian Goods
The administration will use an untested legal provision to put significant duties on Canadian exports, reigniting a clash with one of America’s biggest trading partners.
The tariffs, which go into effect in 30 days, would be imposed on a range of Canadian exports, including wine, hockey sticks, cement, dairy products, plywood, paper and furniture. Administration officials said the taxes were punishment for Canadian discrimination against three U.S. industries: motor vehicles, dairy and alcohol.
The new tariffs will be imposed under an obscure legal provision, Section 338 of the Tariff Act of 1930, which Congress wrote as the Great Depression deepened. The law allows the president to put tariffs of up to 50 percent on imports from countries that discriminate against U.S. commerce uniquely, as compared to other countries.
The tariffs will not apply to energy products, potash, certain fish and minerals, or products that are already subject to national security tariffs ranging up to 50 percent, like steel. Yet unlike previous rounds of U.S. tariffs, there would be no exemptions for Canadian goods covered by the United States-Mexico-Canada Agreement, the free-trade deal that Mr. Trump negotiated and signed into law during his first term, a senior administration official said.
Ryan Majerus, an international trade lawyer at King & Spalding, said using the law, which was written in the Smoot-Hawley era, was “very broad in scope.”
“But it’s completely untested and will be challenged in court,” Mr. Majerus said. He said the Trump administration might have imposed the tariffs to give itself more leverage in U.S.M.C.A. negotiations.
Eswar Prasad, a professor of trade policy at Cornell University, said that Mr. Trump clearly had “not been deterred either by U.S. courts or retaliation by other countries in his determination to use tariffs to bludgeon U.S. trading partners.”
“These orders make clear that, despite a number of unfavorable court rulings, Trump is hardly done with using tariffs as a broad economic and geopolitical tool to bend other countries to his will,” he said.
Trump Angered Over Canadian Fires
The Wall Street Journal reports Trump Imposes Additional 50% Tariffs on Certain Canadian Goods
The move comes after the administration plunged the future of its signature trade pact with Mexico and Canada into doubt in recent weeks, though talks on a potential new U.S.-Mexico-Canada Agreement are ongoing. Trump has publicly threatened to terminate the USMCA, which he negotiated in his first term to replace the North American Free Trade Agreement, known as Nafta. U.S. Trade Representative Jamieson Greer has also floated separating the three-nation agreement into two separate pacts—one with Mexico and one with Canada.
It also comes after smoke from raging wildfires in Canada drifted into the U.S., blanketing cities including New York, Chicago and Washington. In a Truth Social post Friday, Trump threatened to impose steeper duties on America’s northern neighbor to compensate for the smoke’s impact.
“We are holding Canada responsible for the fact that they are not properly maintaining their Forests, and Brush therein, and the United States is being unnecessarily invaded by filthy, polluted, and unhealthy air, the quality of which is dangerous, and totally unacceptable!” Trump said.
“I told them, I mean, you got to stop these fires from coming in and you know poisoning our air,” Trump said. “Our air has been poisoned. Have a good relationship with Mark Carney, but you know we got to stop the fires up there. If we can help them, we’ll help them. But maybe they should pay us some damages or something, or we should do some tariffs.”
Official Statement
It is likely going to take me a while to sort through all the claims and the 1930 case law.
Meanwhile, here is the official announcement: Ambassador Greer Issues Statement on President Trump Imposing Section 338 Tariffs on Canada
“While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” said Ambassador Greer. “Specifically, Canada has taken U.S. alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on U.S. vehicle exports to Canada from companies reshoring to the United States. Today, President Trump took decisive action to hold Canada accountable for its retaliation and discrimination, delivering on his promise to correct trade imbalances and ensure fairness for American workers, farmers, and businesses.”
To read the Section 338 action on motor vehicles, click here.
To read the Section 338 action on alcohol, click here.
To read the Section 338 action on dairy, click here.
To read the White House Fact Sheet, click here.
Background:
Section 338 of the Tariff Act of 1930 (19 U.S.C. 1338) empowers the President to, among other things, impose duties of up to 50 percent on imports of a foreign country to offset the burden or disadvantage from a foreign country’s unequal imposition on or discrimination against the commerce of the United States. On July 20, 2026, finding that the public interest will be served by his actions, President Trump took three separate Section 338 actions to level the playing field for important American exports to Canada—motor vehicles, alcoholic beverages, and dairy. To offset Canada’s unreasonable and discriminatory measures against these products, President Trump is imposing a 50 percent tariff on nearly $20 billion in imports from Canada, which will take effect in thirty days.
Brad Setser
Setser: “Obviously tariffs of this magnitude — even with energy/ auto carve outs with autos still tariffed at lower levels — would devastate Canada’s economy. But they also would raise US prices at a time when oil is heading up; doesn’t feel like an action that has much support.”
Setser is senior fellow at the Council on Foreign Relations.
US Trade Rep
If Trump did not treat Canada worse than China with threats and insults on making it the 51st state, Canadians would not be shunning US products.
US Wildfires
Tariff Crazytown Is Back
Bloomberg Chimes In
Crucially, there will be no exemptions for products under the existing North American trade pact between the US, Canada and Mexico, the official said.
If Trump follows through with the levies, which are set to take effect in 30 days, the move would mark one of the most severe trade actions he’s taken against the US’s second-largest trading partner. But Trump has made such threats before only to pull back after negotiations or because of market concerns. He signed a proclamation ordering the tariffs earlier Monday, the official said.
“I’m not going to react to that,” Canada Energy Minister Tim Hodgson said in an interview moments after the news was announced. “We’ve seen this sort of thing before.”
Last August, Carney announced he would drop many of Canada’s retaliatory tariffs against the US as the two sides were in negotiations. But Trump broke off those discussions in October.
Scott Lincicome may be correct in his assessment ” Section 338 – a short, vague, 96 Year-Old law that’s never been used (and that most experts think is defunct because it was superseded by Sec 301)” but this will take further research.
Bat-Sheet Crazy
Trump’s order is literally bat-sheet crazy.
Brad Setser was more polite. Setser says “The fact that President Trump thinks trade with Canada is so problematic that it warrants 50% tariffs on many (most?) Canadian goods while apparently thinking trade with China is just fine now is a powerful indictment of his second term trade policy.”
Additional Setser comment “Canada could discover it has some export control leverage too … we will see how this plays out.”
Unstable Trump
Trump is now increasingly unstable. He is lashing out at allies, is reckless in war policy, and wants to be the “Guardian Angel” of the Strait of Hormuz.
Trump is clearly listening to Israel on Mideast policy.
He also is punishing Canada for wildfires despite the fact that Canada helped the US when California was burning.
The only positive in Trump’s delusional recklessness is that it increases the odds Republicans totally blow up in flames in the midterm elections.
By the way, please recall my statement that inflation due to tariffs has not ended. I specifically warned that Trump was likely to do something like this.
Related Posts
January 19, 2026: New Research Shows Americans Bear 96% of US Tariff Costs
A study by the Kiel Institute confirms the obvious.
February 24, 2026: Fact Check on Trump’s Claim “Canada Ripped Us Off”. What’s the Real Story?
In a rambling Speech, Trump signals out Canada.
June 29, 2026: Will Trump Wreck the USMCA Review in July?
Trump replaced NAFTA with USMCA. It’s under review on July1. What’s next?
I believe we may have a different answer now to the above question.
Sincere apologies to Canada.
Trump should also tariff Minnesota as quite a few of the fires are in Minnesotas Boundary Waters area.
Someone should inform the idiot of the many times Canadians have sent firefighters and equipment to America for decades to help us fight our own wildfires. He wants Canada to join us but I see the coasts might be more interested in joining Canada…
Another fun fact is that Trump cut funds to the US’s smokejumper firefighter teams.
These teams provided mutual aid and would cross borders to parachute into new fires and quickly contain or extinguish them before they became too large.
When you think about it from a climate change ecenario, Canada should be suing the US for our excessive carbon emissions. After all the US has about 5% of the worlds population and emits over 30% of the greenhouse gasses.
Canada will simply increase their import quotas for BYD’s cars and export more of its oil, grain, steel and aluminum to China.
I would not be surprised if they shut their oil pipelines to the US off as a warning that they have leverage as well. A difficult way to transport oil for export to China or Europe is to put it on tanker car trains to the coasts.
Quite a bit of oil that they export to the US is by rail… Easy to divert the trains to the coasts but difficult to load on ships as the infrastructure is not in place. YET!
Trump is definitely pushing Canada to seek more trade with everyone else in the world. And Carney is indeed travelling the world and making deals. But it takes a long time to build new trade relations. The US will remain Canada’s number one trade partner for a long time.
Canada is not going to cut off oil sales to the US. They still want to sell everything they can to the US, because they want to keep their economy going and they are very dependent on us. (By the way, Canadian oil exports by train to the US are only around 3% of the total. Pipelines are way cheaper.)
I do not expect Trump to follow through on 50% tariffs. Just more of his stupid bluster. Like how he was going to “end Iran” a few months ago.
Thanks, I did not know that it was only 3%, I thought it was more like 10% because of the small section of the Keystone system that was not completed. I do know that China has purchased the first ten years of LNG from Canadas west coast export facilities.
Perhaps an export tax on oil and gas to the US makes more sense?
It makes more sense but it won’t fly in Alberta and Carney doesn’t want to give the separatists there more ammunition. Very unlikely.
New WP Cover Story:
“U.S. strikes unlikely to move Iran, intelligence reports say”“American agencies see a long standoff between Tehran and Washington, as Iran is unlikely to soften its negotiating position because of U.S. military action.”
Meanwhile, the graft and insanity continue.
Trump continues overhaul of White House grounds with new Rose Garden statuesA bronze Thomas Jefferson was installed as the fifth new statue last week. Three were provided by Harlan Crow, a conservative collector and political donor.
FIVE new statues in a week! Clearly he’s ignoring anything of import to the people. (Like he gives a rat’s ***)
Correct. Iran never budged after the first 40 days of being pounded. They just kept firing back at their selected targets.
This was followed by 3 months of intermittent attacks. Still they kept firing back.
Now, another 10 days of pounding. And they just keep firing back.
And they are strategic. The US has lost access to almost all it’s Persian Gulf bases to stage from. Iran has destroyed them. This has forced us to place almost our planes back in Israel. We just had to send over a hundred refueling planes because our fighters can’t get from Israel to Iran and back without midair refueling. Iran keeps pushing our forces further and further away. I suspect that with the hundreds of planes now in Israel that this represents a juicy target for Iran to go after.
We have already lost a lot of planes and helicopters. A report from May 13, said we lost 42 aircraft at that point. Lots more since then.
Netanyahu will insist that US invade Iran.
Netanyahu can insist as much as he wants, but reality prevents the US from invading Iran.
Agree.
Tariffs make companies look for ways to cut the US out of the equation, whenever they can.
https://www.msn.com/en-ca/money/topstories/toyota-trading-arm-cuts-the-us-out-of-canada-mexico-auto-parts-route-to-avoid-tariffs/ar-AA28jqpc?ocid=msedgdhp&pc=U531&cvid=6a5ed222
Another example of Trump never keeping his word.
When he negotiated and signed the USMCA, Trump said:
“We’re gathered together this afternoon for a very historic occasion: the signing ceremony for a brand-new trade deal, the United States-Mexico-Canada Agreement… a truly groundbreaking achievement.”
“Today, we’re finally ending the NAFTA nightmare and signing into law the brand-new U.S.-Mexico-Canada Agreement.”
The USMCA is the largest, fairest, most balanced, and modern trade agreement ever achieved.”
“This is a colossal victory for our farmers, ranchers, energy workers, factory workers, and American workers in all 50 states.”
Upon becoming President again, he then broke this agreement and began putting tariffs on both Mexico and Canada.
Then he gets upset if Mexico and Canada respond in kind.
His word means nothing. His agreements are worthless. There isn’t an official left in the world that expects Trump to keep his word.
He’ll forget all about it by tomorrow. My sister in law is the same way, we’re looking at memory care facilities for her just now.
its not as if he’s stealing over $300Billion from Russia
Not sure what this has to do with the article. Assume you mean the 300bn held in Europe that rightly needs to be allocated to Ukrainian reconstruction.
If you elect mad people, you get mad policies. This madness will only end in January 2029. And it’s prudent to get ready for much worse stuff!
At some point, Trump is really going to piss off the Canadians. He says the US doesn’t need any Canadian products.
Perhaps putting 25-50% export taxes on crude oil, electricity, potash, uranium, rare earth minerals, lumber and aluminum would show him how much America needs some of those products.
I wonder what the price of oil would do with a 50% export tax? I wonder what the US stock market, fuel prices and the Republicans chances in the midterms would do as well. Yes, the US can hurt the Canadian economy severely, but Canada can hurt the US as well.
It’s insane that its got to this point, but your man in the White House is insane and its time someone told him so.
If everyone in the world folds their arms, builds legal walls and jacks up prices, everyone gets poorer. Or perhaps they descend into actual war. 1930s, hello.
According to Climate Central, the heat that helped fuel these fires would have been “highly unlikely” to have occurred in a world without climate change.
https://csi.climatecentral.org/climate-shift-index?firstDate=2026-07-13&indicator=max&lat=47.19223&lng=-109.73145&zoom=4
Absolutely true. Only the inumerate can believe otherwise. They keep trying to blame it on arsonists, which is point-blank stewpudd. A cool wet (no drought) forest does not burn for long. Even if you sent a battalion of Bic lighter equipped arsonists into it.
Carney has been VERY stable but prinsipaled and resolute in dealing with the Orange Child. (I knew is extremely smart as I lieved up there for a decade. His excellent leadership during GFC is why the UK lured him away for a bigger role.)
People aren’t mentioning it but I personally beleive this is retaliation for end of last week Carney saying he was not splitting the new Windsor Bridge fees until first Canada gets paid back for it’s billions in 100% of the new bridge costs.
And likely the fact he can’t skim off money for the old Billionaire who’s been raking in cash on the old Ambassidor bridge for decades. (Recall after talking with the billionaire Trump previously tried to stop it from opening.) THIS is wny he’s now being more biligerant.
Carney is one of THEM.
Worked for Goldman Sachs (The Vampire Squid), used to be chairman of the BIS (Bank of International Settlements), was on the board of the World Economic Forum and has attended meetings of the Bilderberg Group.
He is a full blown, extremely well connected, GLOBALIST. A well dressed wolf in sheep’s clothing. He will sell Canada down the river before he leaves.
Have fun hosers !
I emphatically disagree with you. He IS smart. He is not Trump evil. The UK was most happy having him run their Treasury Dept.
Oh, as for smoke back north east. The whole area is getting major broadbased rain from approx now and for 2-3 days. End of the smoke story.
Considering Canada is the only G7 nation to slip into a recession I am not sure Canadians are all that happy with Carney.
Things have been bad there since Turd-eau was in charge and it’s not really getting much better
From what Canadian media is reporting, Trump is indeed getting half the revenue immediately.
https://torontosun.com/opinion/columnists/carneys-spin-on-gordie-howe-bridge-deal-is-starting-to-unravel
Yes. Canadians are becoming disenchanted with Mark Carney. The three most recent polls from different organizations show his approval ratings have slipped, down to a positive 55%, 57% and 62%.
His main opponent, Pollievre, is 33% and 36% in two polls. Which is even less than Trump’s recent 36%, 37% and 42%.
I’m not understanding the anger over fire smoke from Canada driving tariff policy. We have plenty of our own smoke in southern Oregon from our own fires. However, Canada has about 1/8th our population and 7 times our total national forests acreage. Most of it is inaccessible thinly populated wilderness with the closest roads sometimes 100-200 miles away. It would be next to impossible to “Put ’em all out”. But then again, reasonableness seems in short supply.
I made some tiny money on day-trade today, because, as Mr. Shedlock accurately indicates, this is bat-shit crazy. Trump is bonkers, and really, if you are a Conservative, and you love USA, then you must – you truly must – realize that Donald Trump is mentally defective, and it is now time for this crazy man to be removed from the position he is in. The man is truly, honestly, NUTS. He is mentally ill, and Mr. Vance should be put in charge, and this should happen NOW. The Canadian wildfires are an ugly situation here, also. Were they started by USA lasers and plasma weapons, fired at us from space? No. Of course not. But folks are talking about nonsense like this. Don’t you all see whaf is happening? This is maybe a long-range plan, to break Fortress North America. We still have automated DEW line radar stations in the far north. We are partners in protecting the North-Am homeland. And who wants to break us? (can you say Poo-Tin?).
This is madness. Trump needs to be removed. And it needs to be done by smart, focused, right-thinking Conservatives, to ensure USA does not self-destruct, and is not harmed by idiotic attacks on American allies.
“It is comforting to see President Donald Trump as a crazy man, a one -off, an exception- not a reflection on us or on our democracy. But in ways I never anticipated, his rise was absolutely predictable and a mirror on our soul.”
― Allen Frances, Twilight of American Sanity: A Psychiatrist Analyzes the Age of Trump
“ I made some tiny money on day-trade today,”
Good for you! As I keep saying, we have no control over what Trump does. All we can do is try to take advantage of it.
I also made some money from day trading oil stocks today.
Cheers!
What is next? Tariffs for Africa for sending over hurricanes?
what an idiot.
what about all the pollution that comes up from the US into Canada’s airspace. Remember the acid rain debacle?
Washington state had a fire a couple of years ago that crossed into Canada. Both sides worked together to put it out. I think something similar happened in Montana.
I still think Canada should impose a 15% export duty on all oil shipped to the US while this lame brain is in office.
All this just as travel into the US by Canadians was starting to normalize.
At this point I think we should just randomly select a citizen and give them a 12th grade cognitive equivalency test. If they pass (D or better grade) they get to be president. That couldn’t be worse than the presidents we’ve had to suffer through for the last 25 years.
Fucking 🤡 show.
At least throwing darts at a board, we would get things right a random amount of the time.
Trump needs to be impeached yesterday…guess what else we get from Canada?.. over 60% of the crude we import our refineries use, the sour grade. Which is potentially gonna get a lot more scarce shortly and for a long time.
Taco should be focused on his past promises with the positive ones continue to be a mirage.
Trump’s 18-Month Deadline To Cut Electricity Prices in Half Has Arrived. Rates Are Up 18%. Yet another broken campaign promise.
It’s not his fault, that electrical prices have risen.
It’s the Democrats, in blue states, that have shut down coal fired plants, over windmills and solar panels, that are not cost efficient & reliable…
So sorry, Trump’s aggressive policies to slow the construction of solar and wind have directly increased the cost of electricity. As with everything, the man is dumb as a post. As fuels, coal and natural gas are roughly equivalent, and coal plants are way more expensive to build than natural gas plants. Wind and solar produce the cheapest electricity, and nukes produce the most expensive electricity. Power companies buy as much wind and solar as they can get their hands on as it lowers utility bills and they are building out as much solar and wind as possible.
JCH, I beg to disagree. You have to compare the WHOLE cost of power. Sure, solar or wind may appear cheaper, but its chaotic and intermittent nature requires instant base load power be available to spool up when it comes on and off the grid. Nuke power is steady baseload, same with coal, hydro, natural gas, etc. With renewables it’s as if you have to build the grid twice.
Bill. You are wrong. In 2025, the world added 647 GW of solar, 167 GW of wind because they are the lowest cost.
Nuclear, coal and nat gas combined was less than 50 GW. Why so little? Because renewables are cheaper.
In the US, it was 39 GW of solar, 7.4 GW wind, 3.1 GW nat gas, 1 GW nuclear, negative 6 GW coal.
In Texas, which produces lots of nat gas, it was 6 GW solar, 3 GW wind, 2 GW nat gas. 0 coal. 0 nuclear. Even Texas realizes renewables are the most coat effective.
It is not the lowest cost, it is lowest cost if you don’t include all the costs. Well what’s the point of that argument? Wind and solar have to have 100% backup which is not wind and solar of course, it is despatchable power that is available on demand (spinning reserve). That cost has to be added to cost of panels, posts and fans. If you want to live off grid, be my guest. I want my furnace and sump pumps to work 24/7.
Then you better tell all the companies and industries that are spending tens of billions on solar, wind and battery storage that they are wrong.
Over 800 GW of solar and wind in 2025 plus lots of battery storage to deal with intermittency vs less than 50 GW of nat gas, nuclear, and coal combined.
Which ones will you call first? Let me know they respond.
You’re not addressing the need for every gWh of that capacity being backed up with something that can takeover. That’s a cost that isn’t shown in the official cost of solar and wind. It’s a politically manipulated thumb on the scale nonsense for “climate”. No sensible industrial policy ties itself to wind and solar. All you have to do is look at what happened to Germany. And if you say “Add battery storage” then that’s in addition to the cost per kWh. Storage ain’t free, or permanent, and it’s resource-intensive. It’s been clear in Oregon that as we’ve been getting a higher percentage of wind and solar on our grid, that grid has been becoming more unstable and strained and odds of major disruptions and blackouts are increasing because of the shrinking availability of base load power.
Of course I am.
Just as I suggested to Crispin; Then you better tell all the companies and industries that are spending tens of billions on solar, wind and battery storage that they are wrong.
Which ones will you call first? Let me know they respond.
You’re arguing with the wrong person. I’m not the one building 800 GW of renewable power each year. And the battery storage that solves the intermittency issues. You need to take your arguments to them.
Of course the US only needs to add about 50GW each year for the rest of this decade.
Perhaps you would prefer that the US build more nuclear plants. They are great for baseload power. In the last 25 years the US has built a total of 2GW of nuclear power which cost $35 billion and took 15 years to complete. We just need to build 25x that each year. Too bad it costs so much and takes so long.
Or we could build 2GW of nat gas generation for just $3 billion. Unfortunately, the gas turbines needed have a 5 year wait list at this point. And we need to build more pipelines to move that gas to wherever we build the plants.
Or we could build 2GW of solar for $2 billion. And add $1 billion of storage. And build it in one year. Which is what everyone is actually doing because it is available and inexpensive.
I believe it’s more accurate to say renewables are cheaper in the short run?
Hydro and natural gas plants are both able to (and do) provide a bolstering and lucrative service of “load following”…that fills in the solar/wind gaps.
“Which ones will you call first?” Well, I’ll start with my own utility (Washington state) that promises “affordability” with their portfolio of hydro and Nat Gas. Still, my state continue to build data centers…sigh.
It’s not just about price. Though price is important.
It’s also about availability. The US needs to add 50GW per year going forward. Where is it going to come from? 2GW of nuclear costs $35 billion and takes 15 years to build. We can build 50 GW of nuclear for $875 billion, but it doesn’t help us till 15 years down the road. And that’s just for one year of new power, 15 years from now. What about the next 5 years?
Nat gas turbines have a 5 year wait list if you order today. I’m a big fan of nat gas generation. But it doesn’t solve our problem today. Or the next 5 years.
Lol! The coal plants shut themselves down because they weren’t competitive with natural gas and renewables.
But if you want to get political about it:
During Obama’s 8 years, 48 GW of coal generation shut down
During Biden’s 4 years, 41 GW shut down.
During Trump’s first 4 years, 57 GW shut down.
Another 50 GW is scheduled to shut down during Trump’s second term.
Coal is simply too expensive compared to everything else except nuclear, which is even more expensive.
Not competitive means not competitive when all the nonsense “carbon rules” and renewable portfolio rules in the Gang Green ruled states are factored in. It’s a fake politicized energy market with perverse incentives. In Oregon, hydro power…as clean and green and renewable as it gets, is NOT part of power company renewable portfolios because…well, you have to put a thumb on the scale in favor of wind and solar. Besides…the agenda is to blow every dam to smithereens, even if it destroys our economies.
Too bad we have used up all the good hydro sites. So what’s left?
Coal, nuclear, nat gas, and renewables.
What’s the great oil state of Texas doing? Adding more renewables than the other three options combined.
Texas is unregulated. No carbon issues. And they are going big on renewables because they are the best option. They have now passed California in terms of renewables and battery storage.
Something like this is true in Washington. Hydro is not “renewable”.
Only the MW improvements to hydro (more efficient turbine) are deemed renewable.