Trump Is Taxing Hockey Sticks Now, Using a Law From 1930

A Law Older Than Sliced Bread, Deployed Against Our Nicest Neighbor

The Trump administration plans to implement the new duties under Section 338 of the Tariff Act of 1930, a law that authorizes the president to slap tariffs of up to 50% on any country that discriminates against American commerce. As NBC News reports, no president has ever invoked it. Not FDR, not Nixon, not either Bush. It took this administration to finally crack it open like a dusty emergency kit.

The targeted goods cover about $20 billion worth of Canadian exports to the U.S., including hockey sticks, clothing, wines, certain dairy products, and building materials like cement and plywood. Energy products, potash, fish, and critical minerals are exempt. So Canada gets to keep selling us oil but not lumber for our houses. Great system.

Legal challenges are essentially guaranteed, according to NBC News. Whether courts move fast enough to stop Wednesday's implementation is a different question entirely.

The Talks Are Going Terribly

Canadian officials have been flooding Washington for the better part of a week trying to avert this. Dominic LeBlanc, Prime Minister Mark Carney's minister for U.S.-Canada trade relations, spent Sunday in a one-hour meeting with U.S. Trade Representative Jamieson Greer. That followed, per a spokesperson for LeBlanc who spoke to NBC News, "several days of detailed technical discussions" between Canada's chief trade negotiator and U.S. Deputy Trade Representative Jeff Goettman.

Monday brought another round of talks, with Commerce Secretary Howard Lutnick also joining the session. But CBC reported the two sides are at an impasse. Canadian officials wouldn't give NBC News any details on where things actually stand. The USTR's office didn't even bother responding to questions.

That silence tends to mean one of two things: a deal is close and nobody wants to jinx it, or there is no deal and nobody wants to say it out loud yet. Given the pattern of the past 18 months, the smart money is not on the optimistic reading.

How We Got Here: A Brief History of Two Countries Punching Each Other in the Wallet

This didn't start Wednesday. For well over a year, the U.S. and Canada have been in a grinding trade tit-for-tat. The Trump administration imposed sweeping tariffs on steel, aluminum, and autos, then piled on IEEPA tariffs targeting Canada specifically over alleged fentanyl trafficking through the northern border. Canada pushed back hard, denying that its border was a meaningful source of fentanyl entering the U.S., and retaliated with tariffs of its own on American goods.

Now the administration says Wednesday's new tariffs are punishment for that retaliation. Greer made that crystal clear last week. "The policy basis for these duties are related to measures that Canada took against the United States," he said, according to NBC News. He then compared Canada's standing to China's: "I've got two countries in the world that have retaliated against the United States for trade measures: the People's Republic of China and Canada. That's not the kind of company you really want to be running in."

Canada apparently disagrees with the characterization. Prime Minister Carney called the threatened tariffs "the latest in a series of unilateral U.S. trade actions" that are in "direct violation" of the USMCA, the trade deal Trump himself signed during his first term. Which is a pointed thing to note. This administration is blowing up its own deal.

What This Costs Regular People

Yale's Budget Lab estimates that existing tariffs already cost the average American household roughly $1,100 per year. Consumer prices, per NBC News, have climbed 3.4% over the last year, up from 2.4% before the Iran war. Piling more tariffs onto goods from a $380 billion trading partner does not typically make that number go in a better direction.

KPMG chief economist Diane Swonk put it plainly: "Tariffs were once considered a one-off but they are hitting sequentially. We will see more cost pressures." She made those remarks Friday. Canada is also feeling the squeeze from the other side of the border, with Statistics Canada reporting Monday that inflation there rose 3.0%, up half a percentage point from the previous month.

And this is not the only front. In mid-July, the Trump administration hit 60 separate economies with another round of tariffs tied to forced labor investigations. Evercore analysts warned in a July note, cited by NBC News, that this represents "the most aggressive posture we have seen from the Administration since the Supreme Court IEEPA decision" and could be "a harbinger of things to come." If you were hoping for a ceiling on this, there is no ceiling visible from here.

The White House's Stated Rationale

The White House says this is all about leveling the playing field. The official position, per NBC News, is that the tariffs respond to Canada's "discriminatory treatment of American products" and that the administration is "leveling the playing field for crucial American exports: cars, alcohol, and dairy."

That framing is doing some heavy lifting. The U.S. and Canada have been trade partners for generations under agreements both countries signed voluntarily. Calling the other party's reciprocal response to your own tariffs "discrimination" is a creative reading of cause and effect. It is the rhetorical equivalent of punching someone and then complaining they raised their hands.