{"id":4753,"date":"2026-08-02T13:11:11","date_gmt":"2026-08-02T13:11:11","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=4753"},"modified":"2026-08-02T13:11:11","modified_gmt":"2026-08-02T13:11:11","slug":"trump-just-invoked-a-1930-tariff-law-no-president-has-ever-used-against-canada","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=4753","title":{"rendered":"Trump just invoked a 1930 tariff law no president has ever used \u2014 against Canada"},"content":{"rendered":"<div>\n<p>The administration argues that the new tariffs are necessary to address Canada\u2019s harmful discrimination against the United States auto industry, and are justified by Section 338 of Smoot-Hawley. But Section 338 has\u00a0never been used\u00a0to impose tariffs before this year. Section 338 was designed to deter foreign retaliation by allowing the President to increase tariffs against a country that had discriminatory tariffs or trade restrictions on American goods.<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=4751\">\u2018It\u2019s really not for the faint of heart\u2019: This 29-year-old CEO became a business owner, doubled revenue in 3 years, and learned what car not to drive<\/a><\/p>\n<p>While there can be no doubt that Canada\u2019s 25% tariffs on U.S. autos are discriminatory because they target American goods without putting similar burdens on goods from other countries, the administration\u2019s evidence supporting the tariffs is weak at best.<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>In its\u00a0Proclamation\u00a0announcing the new tariffs, the administration claimed that Canada\u2019s 25% tariff on U.S. autos and auto parts\u2014enacted days after Trump\u2019s April 2, 2025 \u201cLiberation Day\u201d Executive Order announcing new U.S. tariffs on Canada and virtually every other country in the world\u2014unfairly discriminates against the American auto industry, thus \u201cdisadvantaging the commerce of the United States compared to the commerce of other countries.\u201d<\/p>\n<p>In support of this view, the administration claims that Canadian imports of U.S. autos \u201cfell precipitously\u201d by more than $5 billion, or \u201capproximately 22%,\u201d while Canada\u2019s imports from Mexico, Japan, Korea, and Germany increased by nearly $3 billion.<\/p>\n<p>A closer look at\u00a0actual trade flows\u00a0tells a different story, however. As the chart below shows, Canadian imports of U.S. autos historically have far exceeded those from the other listed countries. Since April 2025, Canada\u2019s auto imports from the other countries have increased slightly or stayed the same, while Canada\u2019s imports of U.S. autos have bounced around, falling sharply late last year, rebounding sharply during the first quarter of this year, then trending downward again\u2014ending up, most recently, around the level they were in April \u201925.\u00a0<\/p>\n<p>Moreover, it\u2019s not clear that the tariffs are the cause of the modest decline in American auto exports to Canada. A more likely explanation is that Canadians, like Americans, are holding on to their existing cars longer, resulting in fewer new car purchases overall, which would affect both U.S. and foreign imports.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>Indeed, a recent\u00a0survey\u00a0for Toyota Canada indicated that 56% of Canadians were delaying major purchases, including auto purchases, because of \u201caffordability concerns.\u201d Mid-year\u00a0data\u00a0from the Automotive News Research and Data Center, showing a modest 1% decline in overall new car sales in Canada\u2014with General Motors \u201conce again\u201d leading \u201call manufacturers in Canadian sales,\u201d and Ford ranked second\u2014would seem to support this.<\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=4749\">Trump backs off from new strikes on Iran, claiming Mideast allies have outlines of an emerging deal to reopen the Strait of Hormuz<\/a><\/p>\n<p>In short, despite the discriminatory tariffs in both directions, Canada continues to support the U.S. auto industry. Although American auto exports to Canada may have declined slightly in the past year, the United States is still Canada\u2019s primary source of imported cars.<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<p>Interestingly, while the administration noted that Canada\u2019s 25% tariff also applies to American auto parts, it avoided any claim about economic harm. That may have been because trends in Canada\u2019s auto parts imports also undermine the administration\u2019s argument.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<p>As shown in the second chart below, over the past year Canadian imports of U.S. auto parts have stayed at or above their historical range. And, similar to autos, auto parts imports also surged in the first quarter of 2026, reaching their peak in March of this year. Auto parts exports have not been trivial either; they have historically been close to the value of auto exports and in the past year have exceeded the value of auto exports. Canadian tariffs have had no clear negative effect on American auto parts exports.<\/p>\n<div>\n<div><\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<p>Canada\u2019s tariffs may harm the Canadian economy, but they\u2019re not harming America\u2019s\u2014at least not the auto sector, which is the focus of the administration\u2019s Section 338 retaliatory action.<\/p>\n<p>The announced new U.S. tariffs on Canada are responding to a problem that American tariffs started. Trying to get back at Canada with new tariffs because Canada is trying to get back at America for the tariffs we unilaterally imposed is a fool\u2019s errand. A tariff war with Canada is another potential U.S. war with no winner and no end. But there are likely losers: U.S. and Canadian consumers and the U.S. and Canadian economies.<\/p>\n<p><em>The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of\u00a0<\/em>Fortune<em>.<\/em><\/p>\n<p>Read more <a href=\"https:\/\/crosscountrymovingteams.com\/?p=4747\">SpaceX\u2019s record IPO is helping spur a new wave of startups aiming for orbit and opening a vast new market beyond Earth<\/a><\/p>\n<p>Caleb Petitt is a research fellow at the\u00a0Independent Institute, Oakland, Calif.<\/p>\n<div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n<div>\n<div><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The administration\u2019s evidence supporting the tariffs is weak at best.<\/p>\n","protected":false},"author":1,"featured_media":4752,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tariffs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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