Canada's retaliatory tariffs could undermine legal case against U.S. duties

In a report slated for release, the Montreal Economic Institute says Ottawa’s latest round of 50 % counter-tariffs on American products may erode Canada’s legal arguments against President Donald Trump's earlier duties on Canadian imports. The institute points out that such retaliatory measures are inherently discriminatory, potentially justifying the U.S. actions under the historic Smoot-Hawley tariff framework. Ilya Somin, a law professor at George Mason University and co-author of the report, acknowledges the political appeal of a strong response but warns of legal risks.

Although the 1930 legislation set a precedent for reciprocal tariffs, more recent laws could supersede it, leaving the outcome uncertain. The report labels the U.S. tariffs as harmful, illegal, and indefensible, and notes that many economists view tariff escalations as costly for both economies. Industry Minister Mélanie Joly maintains that the measures will strengthen Canada’s negotiating position in future talks.