Trump targets Canada with ‘nuclear option’ 50% tariffs — one Canadian premier calls for a ‘dollar for dollar’ response. How to prepare for a trade war

U.S. Trade Representative Jamieson Greer referenced Canada’s “retaliation and discrimination” against the U.S. for previous Trump tariffs as a reason for this new levy, according to CTV. Canadian Prime Minister Mark Carney said in a statement that Canada “has merely matched those measures,” referencing Trump’s attacks on Canadian sovereignty and saying Canada is “ready to intensify” trade discussions regarding the United States-Mexico-Canada Agreement, USMCA. Neither the White House nor the Prime Minister’s Office returned Moneywise’s request for comment.

One pundit, however, described Trump’s invocation of Section 338 as “the nuclear option for Trump tariffs,” while Ontario Premier Doug Ford called for Canada to “respond tariff for tariff, dollar for dollar” if the taxes actually come into effect in 30 days.

Dave Townsend, an international trade expert and a partner at Toronto-based international law firm Dorsey & Whitney LLP, told Moneywise that the Section 338 tariff invocation simply “appears to be the fastest most expedient way” for Trump “to propose tariffs on goods from Canada, aside from IEEPA.”

What will the 50% tariffs impact?

The tariffs against Canada, meanwhile, will impact some goods previously exempt under the USMCA, while excluding “energy, potash, products subject to tariffs under (section) 232 and certain other goods, such as fish or critical minerals,” CTV reports.

The list of potentially tariffed products, however, is seemingly random, applying to everything from alcohol, furniture, tools and clothing to sports equipment, postage stamps and antiques between 100 and 250 years old.

The tariffs mark a retaliation against Canadian boycotts of U.S. products like spirits and wine, with imports into Canada dropping 70% and 78% respectively last year, leading to hundreds of millions of dollars in lost revenue. Trump also noted Canada’s ongoing 25% retaliatory tariff against U.S. automobiles, and even recently threatened new tariffs over Canadian wildfire smoke blowing into multiple states (something one pundit called ‘nonsense’).

A new trade war may raise prices. Here’s how to protect your finances now

Townsend told Moneywise that it’s “hard to say” how potentially damaging to U.S. consumers a new tariff war with Canada could be. He explained that “a 50% tariff is very significant” because many U.S. importers relied on the USMCA for better rates for Canadian goods.

While some believe that the 30-day window for implementing the new tariffs signals the potential to negotiate a solution, it’s a good idea to prepare your finances just in case. Experts say that includes reducing unnecessary expenses and waiting for store sales, taking advantage of credit card and cash back rewards and buying store brands or domestically-produced products, NBC reports.

Proper budgeting through it all, of course, is key, while boosting savings or an emergency fund in a high-yield savings account is another option for making money stretch further. Starting a side-hustle for extra cash and paying down high-interest debt now could also pay off if tariffs hit.

“The economic significance of the tariffs,” Townsend added, “will depend at least partly on how long they are in effect, assuming they ultimately are implemented.”