50% TARIFF LANDS ON $20B OF CANADIAN IMPORTS

🚨 A 50% tax now sits on $20 billion of Canadian imports, and the legal authority behind it has never been used before.

Fortune reports that Trump reached back to Section 338 of the Tariff Act of 1930, the Depression-era Smoot-Hawley law, to impose the levy. Ottawa retaliated dollar for dollar.

Section 338 lets a president impose tariffs of up to 50% on countries that discriminate against US businesses. The stated grievance: alleged Canadian discrimination against US dairy, auto and alcoholic beverage exports.

The catch, per Fortune: the provision has never been invoked, never been tested in court. One trade lawyer called it "literally a blank canvas because it's never been litigated." Legal scholars cited in the piece say Washington considered using it against Spain in 1932 and China in 1949, then didn't.

Some lawyers argue later laws superseded it, pointing to the Trade Expansion Act of 1962 and the Trade Act of 1974, both of which gave presidents tariff power with procedural strings attached.

Critics quoted by Fortune also note the tariffs hit Canadian goods unconnected to the complaint, including hockey sticks and cement, with no calculation of the dollar damage the statute requires offsetting.

Trump's bigger tariff plays already lost in court. The Supreme Court threw out his 1977-law global tariffs in February, and a New York trade court rejected the replacement set.

So far, no lawsuit has been filed over the Section 338 tariffs. They cover only 5% of Canadian imports, meaning fewer companies pay them and fewer can claim injury. Talks between the two countries broke off Aug. 21.

📉 Who ends up eating this 50%: the importer, or the shopper?

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