Peter Navarro: Canada wants free trade — only on its terms

Peter Navarro is the White House Senior Counselor for Trade and Manufacturing. He submitted this to National Post to articulate the U.S. view on trade with Canada. Read the Post’s Carson Jerema’s response.

Canada has long cultivated the image of America’s friendly, free-trading neighbor. The reality is less polite.

Behind the maple-leaf branding is a protectionist system that singles out American farmers, distillers, automakers, and workers. Canada demands access to the American market while reserving the right to close its own when competition becomes inconvenient.

President Donald Trump is ending that one-way arrangement with three proclamations imposing additional 50 per cent tariffs in response to Canada’s obstruction of American dairy exports, government-directed blockade of American alcoholic beverages, and punitive tariff system targeting U.S. made vehicles.

The authority is Section 338 of the Tariff Act of 1930. It permits additional duties of up to 50 per cent when another country discriminates against American commerce or favourrs competitors. The duties take effect 30 days after the proclamations, giving Canada time to end them.

These are not blanket tariffs. Each proclamation targets selected products to offset a burden on American commerce.

Section 338 authorizes the President to offset the full burden, not merely mirror the offending product. Tariffs on Canadian dairy, alcohol, or autos alone would not equal the damage caused by Canada’s measures, while autos and auto parts are already covered by a separate Section 232 regime. The proclamations therefore extend to additional Canadian goods. The goal is a comparable burden until Ottawa lifts its burden on American producers. This is reciprocal trade enforcement, not economic aggression.

Consider dairy.

Canada’s supply-management fortress uses production quotas, administered prices, import controls, and prohibitive over-quota tariffs. Its tariff schedule imposes rates of approximately 241 per cent on some fluid milk, 245.5 per cent on cheese, and 298.5 per cent on butter.

These are megatariffs designed to stop trade.

President Trump’s United States-Mexico-Canada Agreement secured additional quota access for American dairy producers. Canada then manipulated that access.

Under Canada’s allocation rules for the USMCA cheese quota, retailers cannot receive allocations. Yet under Canada’s agreement with the European Union, retailers may participate in the comparable quota. European cheese therefore receives access denied to American cheese.

That is discrimination by nationality.

The dairy proclamation answers with an additional 50 percent tariff on targeted Canadian goods, including milk powders, whey products, milk proteins, lactose, and casein.

Next comes alcoholic beverages.

Beginning in March 2025, Canadian provinces and territories used their control over wholesale purchasing and retail distribution to remove American beer, wine, bourbon, whiskey, and other beverages from Canadian commerce.

Provincial governments control alcohol wholesaling and often retail. They stopped purchasing American products, canceled orders, erased them from catalogues and websites, and removed American bottles from government-controlled shelves.

Ontario’s liquor monopoly removed American alcohol from stores. Quebec ordered American products off shelves and stopped supplying stores, restaurants, and bars. Most Canadian jurisdictions continued buying from other foreign suppliers.

The damage was immediate. Comparing March 2025 through February 2026 with the previous year, Canadian imports of American alcoholic beverages fell 81 per cent — from roughly $718 million to $136 million. Imports from other countries increased by more than $170 million, including over $100 million from the European Union.

The alcohol proclamation responds with an additional 50 per cent tariff on Canadian beer, wine, whiskey, vodka, gin, rum, liqueurs, and other selected products.

Finally, automobiles.

Since April 9, 2025, Canada has imposed a 25 per cent tariff on non-USMCA-compliant U.S.-made vehicles. Even qualifying vehicles are taxed on the value of components not originating in Canada or Mexico. No comparable tariff applies to vehicles from Japan, Korea, Germany, or other competitors.

Comparing April 2025 through March 2026 with the preceding year, U.S. vehicle exports to Canada fell approximately 22 per cent, from roughly $25.9 billion to $20.3 billion. Canadian imports from Mexico rose 23.6 per cent, while imports from Japan, Korea, and Germany also increased.

That is industrial discrimination: penalize the American vehicle, reward the foreign substitute, and use tariff relief to keep factories in Canada.

Ottawa will argue that these actions retaliated against American tariffs. That misses the law and economics. American Section 232 auto tariffs operate under a national-security framework and credit American content. Canada’s system singles out U.S. commerce while treating competing foreign commerce more favorably.

Section 338 was written for such conduct.

Free trade cannot mean Canada is free to sell while America is forbidden to compete. Under President Trump, the era of one-way concessions is over.

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