The Trump administration is slapping 50% tariffs on some Canadian goods

The Trump administration is angered over Canada's treatment of U.S. automobile, alcohol and dairy products.

The Trump administration on Monday said it would slap 50% tariffs on some goods imported from Canada, in an effort to end what it sees as discriminatory trade practices by Ottawa against the U.S. automobile, dairy and alcohol industries.

Senior administration officials said they were using Section 338 of the Tariff Act of 1930 for the first time to put in place tariffs that will go into effect in 30 days, leaving some time for bilateral talks. Energy, potash, fish and critical minerals are exempt from the new levies.

The relationship between the U.S. and Canada has deteriorated during President Trump's second term. Earlier this month, Trump declined to renew the USMCA, a trade deal he negotiated with Canada and Mexico. The agreement will expire in 10 years if not renewed.

Canada and Mexico want to renew the deal. The U.S. and Mexico have been holding talks on bilateral trade issues, but discussions with Canada have lagged. The tariffs announced Monday will hit Canadian goods that are covered by the USMCA.

The new tariffs are defensive measures aimed at existing discrimination of U.S. exports to Canada, according to senior U.S. officials.

They noted that eight of 10 Canadian provinces have pulled U.S. alcohol from shelves last year after Trump imposed tariffs. Canada has also put tariffs and quotas on cars imported from the U.S., to compel American firms to invest in Canada, while tariff rates and quotas on American cheese are much more restrictive than on imports of cheese from the European Union.

The tariffs announced Monday are unrelated to potential levies Trump has threated to put on Canada to pay for the impacts of smoke from recent Canadian wildfires.

-Greg Robb

(END) Dow Jones Newswires