The Current - Trump hits Canada with new 50% tariffs

Episode Date: July 21, 2026

Monday afternoon, Donald Trump announced a long list of Canadian goods that will be slapped with a 50 percent tariff as of August 19th. We talk to Katie Simpson, CBC’s foreign correspondent based in Washington, DC, about what’s going on.

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A message from QP8125. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. In our last half hour, we were talking about politics and Canada's fire management, but it's not just wildfire smoke that has the U.S. President threatening Canada with more tariffs. Yesterday afternoon, Donald Trump announced a long list of Canadian goods that will be slapped with a 50% tariff as of August 19th. Katie Simpson is a foreign correspondent with CBC News based in Washington. D.C. and joins us now. Good morning. Good morning. What is Trump saying now about tariffs?

Well, essentially, this is the latest escalation in U.S. President Donald Trump's trade war against Canada. He's going out of his way to make an example of Canada because, according to a senior Trump administration official, Canada was just one of two countries that fought back when Donald Trump started imposing tariffs on all of us, essentially all of its trading partners. And so the U.S. is making an example in this moment of Canada, pushing back and introducing this plan to hit a wide range of Canadian industries with a fresh round of tariffs. They're 50% tariffs if they go ahead as planned.

And they're targeting a wide range of sectors, things like dairy products, things like wood products, cement, hockey sticks were singled out, those kinds of things. Yeah. And what do you make of those specific points that there are very specific sectors, and industries that he's interested in right now? Well, when a government does this kind of thing, there's a lot of thought and specificity put into it. This isn't just like a random collection of whatever.

One, the Trump administration wants to make sure that Americans have American alternatives that American consumers can buy so that the price crunch isn't necessarily as bad. And they're trying to extract political pressure on Canada. Remember, this is happening in a bigger, broader context of the ongoing attempt to, to save the Canada-US-Mexico trade agreement, Kuzma.

There needed to be some sort of indication by July 1st about commitment to the deal. It still remains in effect, but those negotiations are ongoing about the big picture long-term future of what trading between these three countries looks like. And this could be viewed as yet another pressure tactic to get Canada to try to agree to concessions in the long-term, that kind of thing. But then again, also, this is Donald Trump making an example of Canada, because Canada has continued to stand up. Plus, the Americans have made it no secret.

They are really, really angry about Canadian provinces banning American booze. That's had a significant impact on the American economy. And it's really been a sore point. And how is Trump able to put these tariffs into place, presumably, if they come into effect, when so far they have been protected by Kuzma? Well, Donald Trump has a lot of tools in the toolbox, right? And think of this as yet another example of Donald Trump throwing spaghetti at the wall and trying to see what's going to stick.

Okay, other tariffs have been struck down by the U.S. Supreme Court. We've got a whole bunch of other tariffs we can rely on. So they went back to the Great Depression area, found these 338 section tariffs, which allows the country to impose tariffs of up to 50% against a country that is seen to be discriminating against the U.S. economy against U.S. commerce. And the Trump administration is making the argument that says,

look, Canada's retaliation, the way that Canada is treating American alcohol products, the way that Canada is treating the American dairy industry, and the way that Canada is treating the U.S. auto industry. They argue that that is discriminatory and justification for these tariffs. So there, of course, are likely going to be court challenges, but this is a pattern, a bigger picture pattern within Donald Trump, how he operates. Try something, and worst case, try something, get it underway.

Worst case scenario, it does get struck down, does get stuck in the courts, which could take months to years. But again, it's something they can use that has an immediate. impact on Canada for trade and can have a really negative effect if they're trying to extract concessions from Canada. Yeah. Prime Minister Mark Carney put out a statement yesterday saying, quote, Canada has made a series of detailed and comprehensive proposals to resolve this dispute and to modernize Kuzma. We stand ready to intensify those discussions in the coming weeks.

However, we know that the U.S. trade representative, Jameson Greer, has said there hasn't been much movement from Canada on Kuzma negotiations. So what's your sense of what the Trump administration is really looking for from Canada now then. It's looking for long-term concessions. It wants Canada to agree to terms that are more favorable for the United States. What exactly those are? Who knows? But big picture, the U.S. and Mexico have been progressing with their negotiations. They are having sit-down formal negotiations.

Canada is not at that sit-down formal negotiation point just yet. And we knew it was going to be rocky. This is not necessarily a surprise because Canada has sort of been a tough negotiator when it comes to those things. But at the same time, the Americans know that they have the power here. They know that both Canada and Mexico heavily rely on the U.S. economy and without the U.S. economy and access to sell Canadian goods into that massive market with huge amounts of income, that it will be massively detrimental to the Canadian economy. So they do, while Canada does have a lot of power, does have some levers that can pull. The Americans are truly in the driver's seat.

Just before you go, Katie, what sort of chill have you seen? in the business communities on both sides of the border? What have you heard? Well, in Canada, it's uncertainty. What does this mean particularly for small and medium-sized businesses that might be hit by some of these new tariffs? Does it make their products completely out of the price range of their American consumers? And then for Americans, it's going to be, okay, does this increase the cost of living

at a time when inflation is on the rise already when the war with Iraq is, or the war with Iran, pardon me, is seeing things like energy prices sore? one thing to note that these tariffs do not touch, they do not touch Canadian energy. And that's something the Trump administration knows that the Americans rely on Canadian energy and they don't want to see any more gas prices going up any higher at this critical time. Because remember, the Americans are heading into the very crucial midterm elections. And if the economy is in a bad spot, if Americans can't afford to put gas in their tank, it's going to make it harder for Republicans to maintain control of the House and the Senate.

It'll be an interesting 30 days. Katie, thank you very much for this. Thanks. Katie Simpson is a foreign correspondent with CBC News based in Washington. This has been the current podcast. You can hear our show Monday to Friday on CBC Radio 1 at 8.30 a.m. at all time zones. You can also listen online at cbc.ca.ca slash the current or on the CBC Listen app or wherever you get your podcasts.

My name is Matt Galloway. Thanks for listening. For more CBC podcasts, go to cbc.ca.ca slash podcasts.