Trump revives dormant Smoot-Hawley authority
Summary
President Trump is using a rarely applied part of the 1930 Smoot-Hawley Tariff Act to place a new 50% tariff on some Canadian imports. This move aims to respond to Canadian trade actions and affects about $20 billion worth of goods.Key Facts
- President Trump invoked Section 338 of the Tariff Act of 1930, part of the Smoot-Hawley Tariff Act, to impose new tariffs on Canada.
- The tariffs target select Canadian imports and will start in August.
- The U.S. government says this action responds to what it calls unfair Canadian trade practices and Canadian retaliation to earlier U.S. tariffs.
- About $20 billion in Canadian goods will be affected by the new tariffs.
- This is part of increased trade tensions between the U.S. and Canada, especially after stalled updates to the U.S.-Mexico-Canada Agreement.
- The Smoot-Hawley Tariff Act originally increased tariffs in 1930 to protect U.S. industry but also led to global trade conflicts.
- The new tariffs rely on a part of the law that had not been used before now.
- The economic impact of the original Smoot-Hawley Act contributed to a reduction in global trade but was not the main cause of the Great Depression.
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