Trump Says Canada Discriminates Against American Companies. Now He Has Announced a 50 Percent Tariff On Products

President Donald Trump has imposed a 50 percent tariff on several Canadian goods, but whether the decision will go into effect remains to be seen as it could face legal challenges.

Trump’s tariffs are set to go into effect in 30 days. They target a range of goods ranging from “wine to hockey sticks to cement.” Some items that would be exempt from the measure include energy, potash, products subject to other tariffs, and certain other goods, such as fish or critical minerals.

Trump said the tariffs are in response to Canada’s discriminatory practices against U.S. goods. Specifically, Trump pointed to the auto industry, U.S. alcoholic beverages, and the dairy industry:

• Canadian imports of U.S. vehicles declined 22 percent, about $5.6 billion, from April 2025 to March 2026.
• Canadian imports of U.S. alcoholic beverages decreased by about 81%, or $582 million, from March 2025 through February 2026.
• Canada established tariff-rate quotas on U.S. cheese that are much more restrictive than the tariff-rate quotas imposed on similar imports of cheese into Canada from the EU.

To implement the tariffs, Trump is citing a 96-year-old law. Section 338 of the Tariff Act of 1930 does give the president power to impose tariffs if it is found that another country has discriminated against U.S. goods.

However, it is unclear whether an investigation into the trade practices of the country is required before tariffs can be invoked, Law360 wrote in an analysis. Also, the act might come into conflict with existing trade agreements, which could lead to challenges before the World Trade Organization.

The outlet added that it doesn’t appear that the law has ever actually resulted in any implemented tariffs; rather, the law often was used as a threat to address trade grievances with another country, and measures stopped short of actual tariffs being implemented.

Earlier this year, much of Trump’s original tariff policy was undone by the U.S. Supreme Court. In that instance, Trump had used the 1977 International Emergency Economic Powers Act (IEEPA) to implement sweeping tariffs unilaterally.

Essentially, Trump broadly used the “emergency powers” of the act to implement tariffs against countries for a variety of reasons. For example, tariffs against Canada, Mexico, and China were implemented because drug smuggling had “created a public health crisis.”

In ruling against Trump, the Supreme Court wrote that the president had not identified “clear congressional authorization” to issue tariffs. It noted that the IEEPA “contains no reference to tariffs or duties.”

That ruling has resulted in the Trump administration having to issue billions of dollars in refunds to companies whose goods were illegally taxed. According to Fortune, the administration has issued $71 billion in refunds. It is believed that another $95 billion is still owed by the government.

Although many companies are receiving a refund from Trump’s previous tariff measures, most of the costs of the illegal tax were passed along to citizens who will not receive a refund. An analysis by Federal Reserve Bank of New York found that “nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.”