White House’s strategy of tariff tension may snap

A shock 50% levy on $20 billion of Canadian imports fits the U.S. administration’s bullying tactics. Maintaining uncertainty as a trade deal hangs in the balance might seem a way to maximize leverage. It also risks buckling the continental market sustaining North American automakers.

President Donald Trump said on July 21 the United States would impose 50% tariffs on a wide range of imports from Canada, in response to what his administration called discriminatory treatment of American-made cars, alcohol and dairy goods.

In applying import taxes on goods ranging from wine to cement and ice-hockey gear, Trump invoked Section 338 of the Tariff Act of 1930, which permits a president to impose punitive tariffs of up to 50% against trading partners deemed to have discriminated against U.S. goods.