CANADA PERSPECTIVE

Ottawa, July 24, 2026. Canada is carefully distinguishing between two issues that the US brought together in the same week. On one hand, the new 10% tax on imports related to forced labor, which affects Canada as well as 17 other countries and reaches up to 12.5% for partners like Australia, Japan, or South Korea. On the other hand, a much heavier and strictly bilateral threat: 50% tariffs on over 400 Canadian products, effective August 19, cited as a reason for distinct trade retaliation.

The US Trade Representative, Jamieson Greer, justifies the first measure by citing the failure of dozens of economies to prevent forced labor in their supply chains, calling it both a "human rights abuse" and an "unfair trade practice". According to Global News, Canada had nonetheless hoped for an exemption: in June, Prime Minister Mark Carney stated that goods compliant with the Canada-US-Mexico Agreement would be exempt from the tax. Ottawa has since introduced a bill strengthening its own protections against forced labor, but the text has not yet been adopted - a gray area that could complicate any exemption request.

However, it is the threat of 50% tariffs that is mobilizing the bulk of Canadian political attention. Cited through the rare Section 338 of the 1930 Tariff Act, it targets the milk supply management system, provincial barriers to American alcohol, and Canadian tariffs on autos. Analysts cited by the National Post see this as less of a sanction and more of a negotiating lever in the review of the North American free trade agreement. Meeting with provincial premiers in Charlottetown, Carney chose restraint: "it would be counterproductive to respond in advance," he said, while ensuring that "everything is on the table". Alberta Premier Danielle Smith welcomed this caution, while Ontario and New Brunswick are advocating for using energy exports as a means of pressure - an option that Alberta and Quebec are ruling out for now.