Why Trump’s Canada tariffs are likely to have a modest impact on U.S. prices
President Trump’s 50% tariffs on certain Canadian products could raise their prices in the U.S., but the narrow scope of the levies is unlikely to trigger a broader spike in inflation, trade experts said.
After the tariffs, first announced in late June, took effect on Saturday following a breakdown in trade talks, Canada pledged to impose retaliatory tariffs on U.S. imports beginning Sept. 8.
U.S. businesses and consumers end up bearing the cost of tariffs, according to economists. For example, research by the nonpartisan Tax Foundation found that Trump administration tariffs imposed under the International Emergency Economic Powers Act — overturned by the Supreme Court earlier this year — cost Americans an average of $1,000 per household in 2025.
The new 50% levy on Canadian goods was enacted under Section 338 of the Tariff Act of 1930, which grants the White House authority to impose duties on imports from a trade partner that is discriminating against U.S. commerce.
But while the tariff rate is unusually high, it only applies to about 5% of Canada’s exports to the U.S. and does not constitute “a particularly broad U.S. trade action,” said trade attorney Patrick Childress, a partner at law firm Holland & Knight and formerly assistant general counsel at the Office of the U.S. Trade Representative.
“If Canada’s retaliatory tariffs are similarly narrow, then neither set of tariffs would cause immediate, economy-wide upheaval, and both sides could live with them for some time,” he said.
Another factor that could deter sharp price hikes is that businesses are often reluctant to immediately pass along tariff costs to consumers, especially given uncertainty over how long the Section 338 levies will remain in effect, according to trade attorneys.
“Companies have taken a lot of different approaches to mitigate or share the cost of tariffs to try to avoid passing that on to the consumer,” Ernst & Young trade policy expert Blake Harden told CBS News.
Here are some of the main categories of Canadian goods now subject to a 50% import tax in the U.S.
Alcohol
The White House stated in a document published to the Federal Register that Canada unfairly penalized American-made alcoholic beverages when Canadian provinces in 2025 stopped buying, distributing, and selling U.S. alcohol.
From March 2025 through February 2026, U.S. alcohol exports to Canada fell by roughly 81%, harming businesses and workers, according to the White House.
The new 50% duties apply to beer, wine, cider, pisco and singani, brandy, rum, whisky and other spirits exported from Canada to the U.S.
Dairy goods
The White House also said Canada disadvantages U.S. dairy farmers compared with other countries. In response, the Trump administration is imposing 50% tariffs on Canadian exports of milk and ice cream, including powdered varieties, as well as on other “non-solid” dairy products.
Paper and wood products
The U.S. is also imposing a 50% levy on paper and wood products, including items such as ice cream and popsicle sticks, tongue depressors, pickets, posts and a variety of paper goods.
Ice hockey equipment
Canadian-made ice hockey and field hockey sticks, plus other equipment related to the sports, are included on the White House’s list of tariffed products. Skates are excluded from the new levies.
Home decor and fashion
Tortoise shell, raw hides and horse hair — common fashion and interior design materials — are subject to the 50% levy. A wide range of clothing, including knitted and crocheted dresses, anoraks and windbreakers, gloves and mittens and other wardrobe staples, is also subject to the new duties.
The new tariff will also apply to a range of Canadian exports, including flags, bookbinding materials, some types of vacuum cleaners and Christmas ornaments.
