A proposed 50% tariff on some Canadian goods could take effect Aug. 19 if negotiations fail, while a Senate bill would give the president power to impose tariffs as high as 100% on goods from countries that buy Russian oil or natural gas.
Here’s what an economics expert told USA TODAY’s The Excerpt about the potential impact on consumers and the economy.
What the Canadian Tariffs Could Cover
The threatened tariffs would cover about 5% of overall Canadian imports to the United States, according to Inu Manak, a senior fellow at the Peterson Institute for International Economics. The targeted products account for about 0.5% of total U.S. imports, and 80% of Canada’s exports would remain duty-free.
The affected goods could include wine, beer and spirits; wood and paper products; kitchen and tableware; bamboo items; machinery and electrical equipment; and some sporting goods. Manak said the overall effect on U.S. prices could be small because the products can be imported from other countries.
Why Tariff Uncertainty Could Persist
The proposed Canadian tariffs rely on Section 338 of the Smoot-Hawley Tariff Act of 1930, a provision that has never previously been used to impose trade restrictions. Other tariffs have been imposed under different legal authorities, creating a patchwork of rules that businesses must navigate.
Manak said the uncertainty could continue as companies and countries challenge tariffs in court and the administration considers additional measures. A baseline tariff of about 10% now applies to many imports, with different rates for some countries and products.
Will Consumers Get Tariff Refunds?
The Supreme Court’s rejection of earlier tariffs has led to roughly $166 billion in refunds for importers, but consumers have seen little of that money. Importers paid the tariffs, and some of the cost was passed along to shoppers; companies have been less willing to pass refund benefits back to consumers while litigation continues.
What the Senate Bill Could Do
A Senate-passed bill would authorize tariffs of up to 100% on goods from countries that purchase Russian oil or natural gas. The measure still needs House approval and would give the president broad discretion over which countries and products face tariffs.
Manak said the authority could substantially expand presidential control over trade policy and expose American consumers to higher prices on imported goods. She said existing sanctions laws could target companies that buy Russian energy without imposing broad tariffs on products from trading partners.
This article was originally published by USA TODAY. The interview transcript was automatically generated and edited for clarity. Reporting by Dana Taylor, USA TODAY.
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