Fortune54%
Trump to impose 50% tariffs on most Canadian goods, invoking the ‘nuclear option’ that could unleash a new wave of economic chaos and inflation 65%
By Josh Boak55% The Associated Press63%
7/20/2026, 10:31:36 PM
Keywords: Trump Tariffs, Canada, 50 Percent Tariffs, Nuclear Option, Economic Chaos, Inflation, Usmca, Section 338, Trade Act Of
BS Summary: This article contains 26 faulty reasoning types, including Post Hoc (False Cause), Pessimism Bias, and Appeal to Authority, with Negativity Bias as the most egregious example at 23.6% saturation with 211 hits. Analysis detected 1,736 faulty-reasoning hits from 895 analyzed words, generating a BS Score of 59% and a BS Rank of 65% (7,802 of 21,887 articles). This article is worse (more manipulative) than 64.40% of the article peer group.
President Donald Trump on Monday imposed 50% tariffs on most Canadian goods, declaring that Canada has unfairly discriminated against American autos, alcohol and dairy products.
The move could unleash a new wave of economic chaos , with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return to the White House.
The administration official previewing the action said that Canada was one of the only nations other than China that retaliated against Trump’s previous tariffs and must be held accountable.
The official insisted on anonymity on a call with reporters to preview the president’s actions and said that Trump signed three proclamations to launch the tariffs under Section 338 of the 1930 Trade Act.
Several Democratic lawmakers last year proposed repealing the section because they said Trump could use it to destabilize the economy.
The new 50% tariffs would exclude energy products, potash, fish and critical minerals, but they would include goods that had previously been protected from import taxes by the United States-Mexico-Canada Agreement , or USMCA.
That 2020 trade pact was not renewed by the U.S., triggering a new set of negotiations that could run until 2036.
The White House said in a fact sheet that the tariffs would go into effect in 30 days, meaning there is time for negotiations as Trump has not always followed through on his announced tax hikes on imports.
Still, the tariffs could escalate into a wider trade war as Canada seeks to defend its economy.
The Canadian federal government did not immediately comment on the tariff, but Ontario Premier Doug Ford saw a possible showdown ahead.
“If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar,” Ford posted on social media.
The tariffs also pose a threat to other U.S. trading partners, not just Canada, and inject “massive uncertainty” into the global economy, said Scott Lincicome, vice president of general economics at the Cato Institute, a libertarian think tank.
“We crossed the Rubicon,” Lincicome said.
“The invocation of 338 is the nuclear option for Trump tariffs.”
The new tariffs carry serious political and economic risks for Trump ahead of the November midterm elections for control of Congress.
His “Liberation Day” tariffs last year in April provoked a financial market meltdown over concerns about inflation and a recession, prompting him to walk back the rates for a period of negotiation.
The Supreme Court ruled this February that Trump had lacked the legal authority to impose the tariffs by declaring an economic emergency, causing the administration to find alternative ways to raise import taxes based on a series of legal authorities.
Tariffs are taxes on imports, which companies can then pass along to consumers in the form of higher prices.
The president maintains that the costs created by tariffs will cause manufacturing to relocate to the U.S., though there is little evidence of that in the economic data.
The latest import taxes could worsen Trump’s weak ratings on the economy .
He promised voters when running for the presidency that he would bring prices down, but the annual inflation rate has risen since he became president because the tariffs and the war in Iran are pushing up oil prices.
The Trump administration official said the president had also requested that his aides look into additional tariffs on Canada because its wildfires hurt air quality in the U.S.
He had publicly threatened to do so in social media posts.
At the World Cup final on Sunday, Trump watched the game with Canadian Prime Minister Mark Carney, who has openly challenged the U.S. president and has sought to expand Canada’s trade relations with other nations.
The Trump administration official said their time together at the game was not a working visit to discuss trade and tariffs.
Trump claims in the proclamations that Canada discriminates against American autos, alcohol and cheese relative to other nations, but his argument rests in large part on retaliatory actions taken by Canada after the U.S. president imposed tariffs on Canada under the pretext that it should do more to stop fentanyl smuggling.
Trump noted in his autos proclamation that Canada maintained, starting in April 2025, a 25% tariff on the imports of U.S. motor vehicles that did not qualify for preferential treatment under the USMCA.
The White House said regarding alcohol that all but two Canadian provinces and territories halted the purchase and retailing of American alcoholic beverages beginning last year, which was also a response to Trump’s tariffs and taunts of making Canada the 51st state.
But Trump has long objected to Canada’s treatment of U.S. cheese, saying in his proclamation that Canada discriminates against the U.S. compared to Europe on dairy products.
Trump and Carney have had a frosty relationship, with Carney, a former central banker, who pledged to stand up for Canada during his election campaign last year.
At the World Economic Forum in Davos, Switzerland, in January, Carney called out Trump — without naming him — by saying that the “most powerful” countries are using the economy to coerce less powerful nations.
Trump responded at the time by saying: “Canada lives because of the United States.”
This story was originally featured on Fortune.com
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