by Aissatou Toure
Tariffs, in their most basic form, are taxes applied to imported goods.[1] Governments often use tariffs to protect domestic industries or respond to unfair trade practices.[2] These measures can influence trade relationships, as seen in the ongoing trade dispute between the U.S., Canada, and Mexico, wherein tariffs and retaliatory tariffs were imposed and continuously framed as protecting domestic interests and inadvertently creating lasting impacts that reverberate around the world.[3]
In the early days of his presidency, President Trump initiated a trade war between the United States, Canada, Mexico, and China by announcing an emergency tariff on the three countries on February 1st.[4] Just a few days later, on February 3rd, President Trump agreed to suspend tariffs on Canada and Mexico for thirty days in exchange for agreements related to border control and crime prevention measures.[5] However, he continued to impose tariffs on China, citing trade imbalances and unfair practices.[6] Section 201 of the Trade Act of 1974 grants Trump the power to impose these emergency tariffs. This Act bestows upon the President the power to temporarily raise tariff rates if the U.S. International Trade Commission (ITC) determines that a sudden increase in imports has caused, or is likely to cause, substantial damage to a U.S. industry.[7] The application of these tariffs is contingent on the ITC’s findings of material damage to American producers, which then offers a legal foundation for President Trump’s use of trade protections in this instance.[8]
Juxtaposed to the Trade Act of 1974 is Canada’s Customs Tariff, SC 1997, c 36. The Customs Tariff is the primary legislation that governs tariffs in Canada.[9] It dictates the legal framework under which tariff rates are set for goods imported into Canada.[10] The Minister of Finance in Canada has the authority to propose and implement changes to tariffs through regulations or legislation, subject to approval by Parliament.[11] In certain cases, such as a national emergency or under exceptional trade conditions, the Canadian government may invoke special powers to raise tariffs or impose new ones.[12] Both actors require some alternative body to consent to the imposition of tariffs. Canada’s situation is unique due to its membership in the WTO. As a member of the WTO, Canada is bound by international trade rules, including those regarding tariff rates. Any significant increase in tariffs would typically need to comply with the obligations under the WTO, such as the General Agreement on Tariffs and Trade (GATT).[13] This contrasts with the United States, which remains a member of the WTO but has indicated plans to withdraw due to Trump’s expressed disdain for the organization.[14]
Mexico’s authority to impose tariffs is similarly rooted in both domestic law and international obligations, particularly through its commitments under the USMCA and the WTO.[15] While not having a central authority that imposes tariffs, Mexico has a Mexican Secretariat of Economy that focuses on international trade and promoting local businesses.[16] As the dispute between the U.S. and its neighbors continues, it becomes clear that the regulatory frameworks within each country differ, reflecting each nation’s trade policies and economic priorities. At the center of the dispute, the WTO’s role remains central, as it provides a platform for resolving trade disagreements through established international rules and guidelines. The future of the USMCA agreement hinges on how these tensions are resolved, which is further complicated by each country leveraging its legal authorities to influence the trajectory of trade relationships in North America and the world.
There is no guarantee as to the future of these trade relationships, as the ongoing tariffs and their broader economic effects raise significant concerns about the balance of governmental powers and the consequences for everyday consumers. What is immediate, however, are the direct consequences to consumers. While governments may act under the premise of emergency measures, the impact is far-reaching, with rising prices, supply chain disruptions, and potential job losses becoming increasingly felt by the public.[17] This situation underscores the need to carefully reconsider the necessity and long-term implications of imposing such tariffs, as they may inadvertently harm those they aim to protect. The consequences of these decisions aren’t just felt by the companies directly involved in international trade but also by consumers, who will eventually face rising prices on imported goods to offset the cost of the tariffs.[18] While these tariffs are being placed as emergency measures, there are real and immediate effects that are felt by the people, from higher prices at the grocery store to disruptions in supply chains that can lead to job losses.[19] This result brings into question the necessity of calling for tariffs and underscores the importance of an external regulator like the WTO.
[1] Anshu Siripurapu & Noah Berman, What Are Tariffs?, Council on Foreign Rels. (Feb. 3, 2025, 2:01 PM), https://www.cfr.org/backgrounder/what-are-tariffs.
[2] Id.
[3] Id.
[4] Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico, and China, Whitehouse.gov (Feb. 1, 2025), https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/.
[5] David Alire Garcia et al., Trump Says Americans May Feel Pain from Trade War with Mexico, Canada, China, Reuters, Feb. 3, 2025, https://www.reuters.com/world/us/trump-says-americans-may-feel-pain-trade-war-with-mexico-canada-china-2025-02-03/.
[6] Id.
[7] Christopher A. Casey, Cong. Rsch. Serv., IF11030, U.S. Tariff Policy: Overview (2025).
[8] Id.
[9] Customs Tariff, S.C. 1997, c. 36 (Can.).
[10] Id.
[11] Id.
[12] Id.
[13] General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT].
[14] Ben Horton and Dr Kristen Hopewell, Lessons from Trump’s Assault on the World Trade Organization, Chatham House (Aug. 2021), https://www.chathamhouse.org/2021/08/lessons-trumps-assault-world-trade-organization.
[15] M. Angeles Villarreal & Ian F. Fergusson, Cong. Rsch. Serv., R44981, U.S.-Mexico-Canada Agreement (USMCA): Institutional and Dispute Settlement Provisions (2020), https://crsreports.congress.gov/product/pdf/R/R44981/19.
[16] Secretaría de Economía, Trade and Investment, GOB.MX, https://www.gob.mx/se/acciones-y-programas/trade-and-investment (last visited Feb. 8, 2025).
[17] Supply Chain Resilience Guide, Homeland Sec. Fed. Emergency Mgmt. Agency (Apr. 2019), https://www.fema.gov/sites/default/files/2020-07/supply-chain-resilience-guide.pdf.
[18] Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico, and China, Whitehouse.gov (Feb. 1, 2025), https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/.
[19] Id.
