On August 22, the Trump Administration imposed 50-percent tariffs on approximately $20 billion worth of Canadian imports using an outdated and legally questionable tariff authority under Section 338 of the Tariff Act of 1930. In a new insight, Director of Trade Policy Jacob Jensen and Shantanu R. Kamat examine the U.S.-Canada trade relationship.

Key points:

• These tariffs were initially meant to take effect on August 19 but were delayed after both sides reached a preliminary trade deal; the trade negotiations ultimately fell apart after last-minute conditions were added by the Trump trade team.
• The Canadian government responded by stating it will impose dollar-for-dollar tariffs on U.S. imports, with the retaliatory tariffs going into effect September 8.
• This insight examines the Harmonized Tariff Schedule to determine U.S. reliance on Canadian import and export markets, detailing the leverage each side may weaponize if the trade war is protracted or escalates further.

Read the analysis.