New US tariffs, exemptions take effect on Canadian goods

On Tuesday, the United States enacted new tariffs and exemptions affecting Canadian goods, with the changes coming weeks before the US midterm elections. Among the items impacted by the 50-percent US duties are various cheeses, motorboats, papers, aluminum and steel products, mattresses, and certain types of furniture. Conversely, toilet and facial tissues, fishing gear, and whiskies in containers exceeding four liters are now exempt from the 50-percent duty.

The modifications come as households and businesses in the US grapple with high living costs and recent tariffs on Canadian products potentially raising prices further for some groups. The latest amendments alter the mix of Canadian products subjected to the tariffs, and senior US officials assert that the duties apply to a small portion of overall bilateral trade.

The new tariffs mark the latest escalation in a trade war between the North American neighbors. In August, President Donald Trump imposed a 50-percent tariff on US$20 billion worth of Canadian imports following the collapse of trade negotiations, triggering Ottawa to retaliate with counter-tariffs on an equivalent value of goods. Last week, the White House retaliated against Canada's retaliation by banning some alcoholic beverages and dairy goods, effective September 29, while adjusting its tariff list.

The latest tariffs are implemented under Section 338 of the Tariff Act of 1930, impacting goods covered under the US-Mexico-Canada free trade agreement. They are in addition to Trump's sector-specific tariffs. Furthermore, a senior US official revealed that Trump's earlier pledge to raise tariffs on Canadian automobiles from 25 percent to 50 percent, effective in January, remains in effect.