Canada Faces 50 Percent Tariffs as Trade Rep Invokes National Emergency at Senate Hearing

Canada will face a 50 percent tariff on nearly $20 billion in exports to its southern neighbor as the United States declares a national emergency resulting from discriminatory trade tactics up north, America’s trade representative told lawmakers on Wednesday.Appearing before the Senate Finance Committee, Jamieson Greer said the Trump administration is implementing Section 338 of the 1930 Smoot-Hawley Tariff Act in response to Ontario’s violations of trade agreements. That provision allows the 50 percent tariff on a variety of Canadian goods, including dairy, alcoholic beverages, and motor vehicles as well as other items that are supposed to be duty-free under a deal President Trump negotiated with Canada and Mexico in his first term.Mr. Greer announced the new tack despite lawmakers’ objections and resistance abroad. “The specific authorities this administration is using have changed, but the trade strategy has not,” he told committee members.Tariffs remain central to the administration’s economic policy even though the Supreme Court earlier this year struck down another tariff strategy President Trump enacted as part of his Liberation Day announcement last year. In that decision the court said the president’s use of the International Emergency Economic Powers Act overstepped his authority. Mr. Trump pivoted to using Section 122 of the Trade Act of 1974 to impose new tariffs but that section only allows the tariffs to remain in place for 150 days. The deadline on that use ends this week and the administration is now planning to implement Section 301 of the trade act to replace the tariffs.Section 301 allows investigations of countries for perceived violations of trade agreements. Mr. Greer’s office says it found 54 countries failed to impose and effectively enforce a ban on the importation of goods produced with forced labor. The trade representative is proposing to impose tariffs on those countries under the rule. In response to the ping-pong use of U.S. trade law, the committee’s ranking member, Senator Ron Wyden, on Wednesday asked Mr. Greer if Canada would now face higher tariffs than China. Mr. Greer confirmed that may be the case on some Canadian goods, but overall, China’s tariff rate will remain much higher.Lambasting the administration’s decision-making, Mr. Wyden said the administration has “lost the plot” on tariffs and cannot be trusted with its authority. He said he would be introducing the Congressional Trade Powers Reform Act after the hearing. “It would overhaul existing trade powers to ensure that no future presidential administration can abuse its authority on trade and thrust us into a cost of living crisis. It would require congressional approval of any tariff proposed by the president,” Mr. Wyden said.Senators from both parties raised concerns during the hearing about trade impacts on farmers. Senator Chuck Grassley of Iowa said just two American companies provide most of the nitrogen fertilizer to corn farmers in the nation, tilting the supply and demand model. He has called for antitrust actions against the dominant domestic suppliers while also urging the administration to increase competition by reducing barriers to imports from nitrogen fertilizer-producing countries such as Morocco. Finance Committee Chairman Mike Crapo expressed concern over the lapsing of a trilateral trade agreement known as the U.S.-Mexico-Canada Agreement. “USMCA supports 13 million American jobs, represents a 55 percent increase in investments in the U.S. from Canada and Mexico compared to pre-USMCA levels, and has led to $60 billion in exports in agricultural goods — nearly one-third of all U.S. agricultural exports,” Mr. Crapo said.Mr. Greer said he would fly to Mexico on Wednesday to meet with President Claudia Sheinbaum but has not set up talks with Canada yet. “I’m hopeful that before the end of the year we can have, at least, options for President Trump, and the leaders of Canada and or Mexico to consider potential interim arrangements,” Mr. Greer said.Mr. Greer warned that talks on a longer agreement could stretch into next year as more complex issues, such as automotive rules of origin, need additional time. Mr. Greer also cited environmental standards and labor rules that need further negotiations.The trade agreement with Mexico and Canada has been in place since President Trump’s first term. It replaced the nearly 30-year-old North American Free Trade Agreement, but Mr. Trump has turned highly critical of it. He chose not to renew it at the beginning of the month, putting it under an automatic review. If the agreement isn’t renewed during the review, it will expire in 2036.

Canada Faces 50 Percent Tariffs as Trade Rep Invokes National Emergency at Senate Hearing

Canada Faces 50 Percent Tariffs as Trade Rep Invokes National Emergency at Senate Hearing

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