US Hits Canada with Punitive 50% Tariff

(IDEX Online) - The US will target Canadian diamonds and other exports with a punitive 50% tariff, over and above the new Section 301 tariffs that were introduced on goods from 60 countries last Friday (24 July).

President Donald Trump says the move is designed to "hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hardworking Americans."

On 20 July he signed three proclamations under section 338 of the Tariff Act of 1930, that will take effect on 19 August and that will cover all Canadian diamonds or jewelry exported directly to the US.

In reality though, the vast majority of diamonds mined in Canada are polished in India or elsewhere, and then exported to the US. As a result they will not be subject to the new section 338 tariff.

The tariff covers a vast range of 550 specific product categories aside from diamonds and jewelry, including alcohol, dairy, sporting goods, construction materials, furniture, textiles, and various industrial products.

Canadian prime minister Mark Carney said he was prepared to negotiate with the Trump administration over the new tariffs.

"This trade dispute has raised costs for families, particularly in the US," he said. "Canada stands ready to engage intensively to address outstanding issues with the US to the mutual benefit of our citizens."

Pic shows the Gahcho Kue diamond mine in Canada's Northwest Territories.