New US tariffs, exemptions take effect on Canadian goods

WASHINGTON: Key changes to US tariffs on Canadian goods took effect Tuesday, with cheeses and motorboats among products added to the list of affected items while toilet paper, fishing rod parts and cement are now exempt.

The move comes weeks ahead of US midterm elections, as households and businesses grapple with high costs of living -- while recent tariffs on Canadian products threatened to hike costs further for some groups.

The latest amendments change the mix of Canadian products impacted by 50-per cent US duties, and senior US officials maintained that the tariffs only apply to a small amount of overall bilateral trade.

Various cheeses, motorboats, papers and aluminum and steel products were added to the list, as were mattresses and certain types of furniture.

But toilet and facial tissues, fishing gear and whiskies in containers exceeding four liters are now exempt from the 50-per cent duty.

Also excluded are road salts, needed in states experiencing harsher winter weather, and cement key to construction projects.

Senator Susan Collins of Maine, whose reelection will be key to Republicans retaining control of the chamber, said she had specifically raised the impact of tariffs on road salt and cement to the federal government.

The duties mark the latest salvo in an escalating trade war between the North American neighbors.

President Donald Trump slapped a 50-per cent tariff on US$20 billion in imports from Canada in August after trade talks collapsed, triggering Ottawa's counter-tariffs on a similar value of goods.

The White House pushed back against Canada's retaliation last week by announcing a ban on some alcoholic beverages and dairy goods, effective Sept 29, while making changes to its tariff list.

Trump tapped a little-known legal provision for the latest tariffs affecting Canada, Section 338 of the Tariff Act of 1930.

The new duties apply to goods covered under the US-Mexico-Canada free trade agreement, and come in addition to Trump's sector-specific tariffs.

And temperatures could rise further. A senior US official told reporters last week that Trump's earlier threat to hike tariffs on Canadian autos from 25 per cent to 50 per cent come January remains in effect.