This week, President Trump signed five proclamations that should end any illusion in Ottawa that this trade fight is a negotiation among equals. As of September 29, Canadian beer, wine, spirits, whey, molasses, and heavyweight motorcycles will not be taxed at the American border. Under Section 338 of the Tariff Act of 1930, they will be banned.
This is the lawful and entirely predictable consequence of a choice Prime Minister Mark Carney made three weeks ago. It will end very badly, not for America but for the Canadian economy and people.
Roughly three-quarters of everything Canada sells abroad, it sells to the United States. A country in that position launching a tariff war against its largest customer is a rowboat opening fire on an aircraft carrier. The carrier will notice. The rowboat will sink.
How did this happen? Let's first eliminate the Carney sound bite that somehow the U.S. is picking on poor O Canada.
As defined by Section 338, Canada discriminates against American farmers, workers, and businesses. On April 9, 2025, in retaliation for President Trump's Section 232 auto tariffs, Ottawa imposed a 25 percent surtax on U.S. vehicles that do not qualify under USMCA, and a 25 percent surtax on the non-North American content of vehicles that do.
The discriminatory surtax applies to American-made vehicles only. Not Japanese. Not Korean. Not German. Not Mexican. The result was as Carney intended: U.S. motor vehicle exports to Canada fell roughly 22 percent while exports from every one of those other countries rose.
A month earlier, Canadian provinces had pulled American beer, wine, and bourbon off their government-run store shelves and left the French wine and Scotch whisky right where they were. U.S. alcohol exports to Canada collapsed by roughly 81 percent.
On dairy, the discrimination is older still. Since USMCA took effect in 2020, Canada has rigged its cheese import quotas so European producers get the access and American dairy farmers get the crumbs.
On July 20 of this year, President Trump responded under Section 338 with 50 percent tariffs on Canadian goods, set to take effect August 19. Then came the part the double-dealing Carney would like everyone to forget.
On August 18, the day before the tariffs hit, Carney's government told the United States it was committed to removing the discrimination. The President took Canada at its word and suspended the tariffs.
On August 21, Canada reneged, walked away from the table, and kept every discriminatory measure in place. The Trump 50 percent tariffs took effect August 22.
Ottawa then piled on tariffs of 15 to 50 percent on roughly $20 billion of American goods, and Saskatchewan slapped a fresh 50 percent levy on American alcohol.
Section 338 is very clear about what happens next. If a country maintains or increases its discrimination after the President acts, the President may ban that country's products from the United States altogether. Canada maintained. Saskatchewan increased. President Trump has now ordered the ban.
Here's Carney's worst mistake: he and his Keystone Kops sidekick, Ontario Premier Doug Ford, are trying to outflank the U.S. by lying down with the mercantilist and predatory dog of Communist China.
In January, Carney flew to Beijing, shook hands with Xi Jinping, and announced what he called a "landmark strategic partnership." Its centerpiece: Canada would slash its 100 percent tariff on Chinese electric vehicles and admit 49,000 of them a year, rising to 70,000.
Carney's slogan for this, as of this week: "pivot and prosper." More like pivot and be swallowed whole and spit out.
Doug Ford initially called it "a terrible deal," warned that Chinese EVs are "spy vehicles" that will listen to your phone calls, and said, correctly, "I'm not too sure if President Trump wants Chinese spy vehicles coming across the border, but I bet the answer is no."
Barely a week later, Ford flipped. "If companies are going to come in, no matter if it's from China … we have one request: build the vehicles here, protect the auto sector."
Memo to Mark and Doug: Chinese state-subsidized automakers do not want the Canadian market. It is too small. They want the American market, and Ontario sits an hour from Detroit.
Every vehicle that rolls off a Chinese line in Windsor or Brampton will be stealth engineered to be waved across the border as "Canadian." That is the same Great Transshipment Scam Beijing has run through Mexico, Vietnam, and Malaysia, now proposed for the country that shares America’s auto supply chain.
Not going to happen. Not on Trump's watch.
Here's the perverse benefit-cost analysis that should worry every Canadian. The political benefits of the Carney-Ford Trump-bashing accrue to Carney and Ford. The economic costs of discriminating against America accrue to Canadian workers and families.
Canadians now face a 50 percent U.S. tariff on their steel, aluminum, furniture, paper, and boats starting September 15, a ban on their beer, wine, spirits, and whey starting September 29, and a government spending more than $5 billion of their money to compensate them for its own bad decisions.
That Carney Chasm will continue to widen. Every escalation from Ottawa produces a larger response from Washington under a statute written, in 1930, precisely so the President could answer discrimination with exclusion. Every step closer to Beijing pushes Canada further from the one market it cannot live without.
O Canada. Make the smart move now. We're not budging.
