Trump administration invokes 1930 tariff law in new dispute with Canada

President Donald Trump announced a 50 percent tariff on about $20 billion of Canadian goods, ranging from hockey sticks to building materials, and warned of a similar levy on Canadian automobiles starting in 2027. The administration says the measures are authorized by Section 338 of the Tariff Act of 1930, which permits duties of up to 50 percent when a foreign country is found to have discriminated against the United States.

Section 338 has never been used to impose tariffs, and legal scholars note that the law requires a formal assessment of discrimination and a review by the International Trade Commission, steps the administration has not yet taken. Marc Busch, a former Commerce Department adviser and Georgetown University professor, warned that the president’s reliance on the statute could give him “the most latitude” because the law’s language is vague about what constitutes discrimination.

The move follows earlier attempts by the Trump administration to levy tariffs through other statutes, including the International Emergency Economic Powers Act and Section 122 of the Trade Act of 1974, both of which were struck down by courts. A recent use of Section 301 to target countries over forced-labor concerns remains in effect after the Supreme Court declined to review the case.

Canada responded to earlier U.S. tariffs with its own retaliatory duties, and the two nations have been engaged in a trade dispute since last year. The administration also claims Canada gave the European Union a more favorable cheese quota, alleging further discrimination. Critics argue the claim reflects a selective grievance rather than a consistent trade policy.

Lawsuits challenging the Section 338 tariffs are expected to be filed, but no judicial ruling is anticipated before the 2027 deadline for the proposed auto tariffs. The outcome will hinge on how courts interpret a statute that has never before been applied to impose duties.