Tariffs on our best friend are a tax on American families

Opinion

By Adrian Sterling-Foss

Open Borders, Open Markets

At 12:01 a.m. Thursday, a new list of Canadian goods will start paying a 50% tariff at the border. Under a proclamation President Trump signed last week, 22 products come off the list and 100 go on: cocoa powder, paints, shampoos, soaps, lubricants, polymers, flooring, lumber, carpets and industrial valves, among others. The rate stays at 50%. It is stacked on top of any Section 232 duties, and it applies whether or not the goods qualify under the trade agreement the president himself signed in his first term.

The administration calls this a calibration. I call it a tax increase on Americans, delivered six days before an election, against our closest ally, under a law written in 1930.

That law is Section 338 of the Tariff Act, a Depression-era provision that lets a president impose duties of up to 50% on countries that “discriminate” against American commerce. It sat on the shelf for nearly a century, and for good reason. It was written in the same season as Smoot-Hawley, the tariff wall that helped turn a financial crash into a global depression and taught a generation of policymakers that trade wars have no winners. Dusting it off to punish Canada is not a sign of strength. It is a sign that we have forgotten the lesson.

Who actually pays

Start with the obvious point that tariffs are paid by the importer, which means by American businesses and, ultimately, American consumers. The new list reads like a shopping cart. Shampoo and soap. Paint for the living room. Flooring and carpet for the house you are trying to finish before winter. Cocoa powder for the bakery down the street. These are not strategic goods. They are the ordinary stuff of American life, and as of Thursday they cost more.

The timing could hardly be worse. September’s consumer price index showed inflation at 3.7%. The Federal Reserve raised interest rates last month for the first time since 2023 and could do so again by December. Credit card rates are near 24%. Mortgage rates are around 7.4%. Every new tariff makes the Fed’s job harder and pushes the day of relief further away for the families who are already stretched.

Consider, too, the inputs. Polymers, lubricants and valves are not finished consumer products. They are things American factories buy to make other things. Raising their price makes U.S. manufacturing less competitive, not more. The administration’s own revisions concede the point: it removed plywood, some paper and packaging, machinery, refrigeration equipment and crates from the list, presumably because American producers complained. That is the trouble with tariffs. Every exemption is an admission that the tax hurts us, and every new addition is a bet that the people hurt this time will complain less loudly.

An ally, not an adversary

Canada is the largest buyer of American exports in the world and the top customer for most U.S. states. Our auto, energy and agricultural supply chains are so tightly woven that a part can cross the Ambassador Bridge several times before it ends up in a finished car. Canadian troops have fought beside ours from Normandy to Kandahar. NORAD defends the continent’s skies as one system.

The administration argues that Canada walked away from a nearly finished deal and then imposed retaliatory tariffs on about $20 billion of U.S. exports. Both things are true, and Ottawa has made its share of mistakes. But a negotiation in which each side keeps raising the stakes rarely ends with a better deal. It ends with farmers in Iowa losing a market, auto workers in Michigan losing shifts, and both governments too dug in to back down.

There is also the question of trust. The United States-Mexico-Canada Agreement was supposed to give businesses certainty that North American goods would move freely. Applying a 50% tariff “regardless of USMCA origin” tells every company that has invested on the strength of that agreement that its terms are only as good as the next proclamation. Why would anyone build a plant on that foundation?

A better path

None of this means America should accept unfair treatment. Canada’s dairy protections and digital services policies are legitimate grievances. The answer is to press them through the dispute mechanisms in the trade agreement, through the joint review the agreement requires, and through the patient diplomacy that has made North America the most integrated and prosperous trading region on earth.

Open markets are not a gift we give to other countries. They are how Americans get more for their paychecks and how American firms reach the customers they need to grow. Tariffs on our best friend shrink both.

Congress has the constitutional power to regulate commerce with foreign nations. It should use it, starting with a hard look at whether a 1930 statute was ever meant to be wielded this way. And voters heading to the polls next week should ask every candidate a simple question: Will you vote to make my shampoo, my paint and my floor cheaper, or more expensive?

Adrian Sterling-Foss is the pen name of a Washington Inquisitor opinion columnist writing from a neoliberal, globalist perspective. The views expressed are the author’s own and not those of The Washington Inquisitor.