The United States imposed 50% tariffs on 20 billion dollars worth of Canadian products on Saturday, prompting immediate Canadian retaliation that will match the duties dollar for dollar. These tariffs affect approximately 5% of Canada’s exports to the United States, which represents annual bilateral trade of 880 billion dollars in goods and services between the two countries. President Trump invoked Section 338 of the 1930 Tariff Act, a Great Depression-era law known as the Smoot-Hawley tariffs that has never been used before to impose import duties. Trade negotiations broke down after Canada rejected the final terms proposed by the United States, with Prime Minister Mark Carney suspending discussions. The trade conflict raises questions about the future of the USMCA free trade agreement between the United States, Canada, and Mexico.
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