Trump Imposes 50% Tariff on Certain Canadian Goods Over Dairy Rules

President Donald Trump signed a White House proclamation Monday imposing an additional 50% tariff on certain Canadian goods, saying Canada’s cheese quota rules discriminate against U.S. exporters.

The duty applies from 12:01 a.m. Eastern time on Aug. 19 to covered imports entering the U.S. market. The covered products are identified by tariff classification in Annex II, while Annex I provides product descriptions.

Trump said Canada discriminates against U.S. dairy commerce by applying different eligibility rules to cheese tariff-rate quotas under the United States-Mexico-Canada Agreement, known in Canada as CUSMA, and its trade agreement with the European Union.

The proclamation says Canadian retailers cannot use quota amounts for cheese under the USMCA but may use the comparable cheese quota under the Canada-European Union Comprehensive Economic and Trade Agreement.

Trump said the different rules restrict access to the Canadian market and result in lost sales or revenue for U.S. dairy producers and exporters.

Prime Minister Mark Carney did not directly address the dairy quota allegation. He called the tariff the latest in a series of unilateral U.S. trade actions that began with duties imposed in “direct violation” of CUSMA.

Carney specifically cited tariffs on Canada’s auto sector. He said Canada had only matched the U.S. measures.

Canada has offered detailed proposals to settle the dispute and modernize CUSMA, Carney said. The country is prepared to intensify negotiations in the coming weeks, he added.

The new tariff generally applies on top of other duties and charges. It does not apply to goods subject to Section 232 duties.

The tariff also does not apply to goods covered by the World Trade Organization Agreement on Trade in Civil Aircraft, although unmanned aircraft are excluded from that exemption.

Trump invoked Section 338 of the Tariff Act of 1930. It allows the president to impose additional duties of up to 50% and later revise, suspend or revoke the order.

Carney said Canada’s provinces, territories and people had stood together to defend the economy. He said his government had signed more than 20 new economic and security partnerships and argued that the trade dispute had raised costs for families, particularly in the United States.

Carney said Canada would take whatever measures were needed to support Canadian workers, farmers, businesses and families.