President Donald Trump announced a new round of retaliatory tariffs on July 20 against Canada, invoking the Depression-era Smoot-Hawley Tariff Act in a game of tit for tat that can have no winner.
The administration argues that the new tariffs are necessary to address Canada’s harmful discrimination against the United States auto industry, and are justified by Section 338 of Smoot-Hawley. But Section 338 has never been used to impose tariffs before this year. Section 338 was designed to deter foreign retaliation by allowing the President to increase tariffs against a country that had discriminatory tariffs or trade restrictions on American goods.
