The Trump administration has broadened its trade probes to encompass 60 nations, including Canada, to reinforce the tariff strategies of the U.S. president. U.S. Trade Representative Jamieson Greer informed CNBC on Friday that they are aiming for swift action within a few months.
The office of Greer declared the initiation of investigations on the European Union and several other countries under Section 301 of the Trade Act of 1974. A subsequent news release on Thursday expanded the list of countries under scrutiny, focusing on whether the named nations have policies or practices that unreasonably or discriminatorily impede U.S. commerce.
Following a recent Supreme Court ruling against President Trump’s preferred tariff instrument used for “Liberation Day” tariffs and duties on Canada, Mexico, and China, Trump imposed a 10% global tariff using Section 122 of the 1974 Trade Act. These tariffs do not apply to goods compliant with the Canada-U.S.-Mexico Agreement (CUSMA) on trade.
The Section 122 tariffs can escalate to 15% and expire after 150 days unless Congress votes for an extension, which is unlikely to be granted. Additionally, Canada faces separate Section 232 tariffs imposed by Trump on specific sectors like steel, aluminum, automobiles, and cabinetry.
Trump aims to establish prolonged tariffs through Section 301 investigations, a process involving public consultations and reports. Greer mentioned that if unfair trading practices such as subsidies, excess capacity, or forced labor are found, they will quantify the harm to U.S. commerce and seek resolution with the concerned country. Failure to resolve the issues could result in the imposition of tariffs by the Trump administration.
The focus of the 301 investigation regarding Canada remains unclear, although longstanding trade issues exist between Canada and the U.S., with Trump frequently criticizing Canada’s dairy supply management system. The investigations coincide with the impending mandatory review of CUSMA by Canada, Mexico, and the U.S.
Trump has expressed skepticism about the trade pact, labeling it “irrelevant” and suggesting it may have fulfilled its purpose. While the U.S. has initiated negotiations on the CUSMA review with Mexico, a subject of the 301 investigation as well, there has been no similar announcement from Ottawa and Washington.
Despite Greer’s assertions of barriers hindering negotiations with Canada, such as provincial restrictions on U.S. alcohol sales, a meeting took place last week between Greer and Canada’s new trade team in Washington, including Janice Charette, Mark Wiseman, and Dominic LeBlanc.