Canada could be facing a fresh set of tariffs from the administration of U.S. President Donald Trump at the end of this week. While the latest trade salvo has to do with rules around forced labour, experts say the real reason is to keep Trump’s “tariff wall” up.
Last month, the Trump administration proposed that tariffs of 10 per cent or more be imposed on products from dozens of major trading partners following a probe into imports of goods allegedly made with forced labour.
The report by the U.S. Trade Representative said Canada, Mexico, Taiwan and the United Kingdom were among 60 U.S. trading partners that would face additional tariffs for allegedly failing to enforce a forced labour import ban.
What are the new tariffs about?
On June 2, the USTR proposed that sanctions be imposed under section 301 of the Trade Act of 1974.
“It’s a delegated power from Congress to the President, to effect trade-related measures, usually in the form of tariffs, against trade partners of the U.S.,” said Jesse Goldman, an international trade lawyer and partner at Osler, Hoskin & Harcourt LLP.
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The U.S. proposal has two tiers of tariffs. The first is a 10 per cent tariff against six trading partners — Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan. The U.S. has determined that these countries have prohibitions on the import of goods made with forced labour, but do not impose them.
Most countries facing trade restrictions under section 301 will be facing 12.5 per cent tariffs, since they have “failed to impose and effectively enforce a forced labour import prohibition.”
A way to keep Trump’s ‘tariff wall’?
While the stated reason for the tariffs is U.S. concerns over forced labour practices, some experts say it is a backdoor way to maintain Trump’s “tariff wall” against foreign-made goods.
“I don’t think we should be under any illusion that even if we perfected that legislation and perfected enforcement, that it would change anything with respect to the U.S. approach,” Goldman said.
“It’s a strategic attempt and a pretext, frankly, to continue the tariff wall,” he added.
In February 2025, the U.S. imposed sanctions on nearly all of its trading partners under the International Emergency Economic Powers Act (IEEPA). A year later, after the U.S. Supreme Court struck those down, Trump imposed fresh tariffs under section 122 of the Trade Act.
Those tariffs can only be imposed for 150 days. With the 122 tariffs set to expire on Friday, Goldman says Canada should brace for new tariffs.
“I would expect that the 301 tariffs will be finalized, and the final measures will be announced this week so that will be a continuous tariff wall,” he said.
What will the tariffs cover?
The “coverage or the umbrella of the tariffs” will likely be as broad as the tariffs it is looking to replace, Goldman said.
The 301 tariffs would effectively “restore the baseline tariff levels that had been applied under the IEEPA tariffs for trade partners that account for over 99% of goods imported into the United States,” U.S.-based international trade law firm White & Case says on its website.
However, the USTR proposal lays out several exceptions, including an exemption for goods traded under the Canada-U.S.-Mexico Agreement (CUSMA), the law firm adds.
More than 98 per cent of all goods traded between Canada and the U.S. are CUSMA-compliant and exempt from Section 122 tariffs.
“The Trump administration has included similar exceptions in both the IEEPA tariffs and the current Section 122 tariff, and the structure of those exceptions would likely inform what USTR is developing for this action,” it adds.
These will be in addition to the sectoral tariffs imposed on Canada’s aluminum, steel, lumber and motor vehicle sectors.
–with files from The Associated Press
Canada has already admitted its a problem.but hasn’t dine anything
Incompetence is expensive
Hey “Reality”…here are some facts for you…America’s wounds are all self inflicted…and…the Iran war is going to last forever…your country has massive social problems and crushing debt…
Fact 1 – Canada recently got rid of its policy and is attempting to introduce a new one but lacks the internal intelligence to get it dne quickly.
Saying the accusations are rubbish betrays the aforementioned reality – that our current government believes its previous legislation was weak and have yet to officially replace it.
Just to surprise people with additional factoids – despite Canada not having a legitimate system in place, businesses are still buying shares in shipments that may be associated with slavery.
Good. Everyone should remember what a failed government we have in power and start seriously considering taking the vote away from long-term retirees.