The United States government widened its trade offensive against Canada on Tuesday, hours after its northern neighbor announced roughly $20 billion in retaliatory tariffs on American goods. The episode has revived concern among analysts and economic columnists that President Donald Trump's protectionist strategy could be extended to other trading partners, including Brazil, which has faced steep US tariffs since last year.
According to Brazilian outlet G1, Canada announced retaliatory tariffs of 15%, 25% and 50% on about 700 products imported from the United States, worth roughly C$27.6 billion (close to $20 billion). The measures take effect on September 8 and hit sectors including steel, dairy, appliances and clothing. The move came after US tariffs of 50% on $20 billion worth of Canadian goods took effect on August 22, and a day after Trump announced a fresh round of 50% tariffs on Canadian cars, trucks, auto parts and steel, set to begin January 1, 2027.
To impose the latest tariffs, Trump invoked Section 338 of the Tariff Act of 1930, a provision no American president had ever used before, according to a New York Times report cited by G1. The law allows tariffs against countries Washington deems to be engaging in discriminatory trade practices, but its unprecedented use raises questions about how US courts will interpret it and whether later congressional legislation limits that presidential power. Trade experts consulted by G1 say the maneuver could face legal challenges if the dispute with Canada keeps intensifying.
Why Brazil factors in
In a column for Folha de S.Paulo, journalist Vinicius Torres Freire argues Canada carries economic weight Brazil does not: it receives 14% of total US goods exports, about $350 billion a year, second only to Mexico ($380 billion). Brazil accounts for just 2.3% of US goods exports, which the columnist says means less capacity to retaliate economically against Washington, though it does not remove the political risk. He notes that parts of the Trump administration, the US establishment and major companies maintain other interests in pressuring Brazil, distinct from the trade logic used against Canada. For readers unfamiliar with the dispute, Brazil has been under US tariffs largely tied to political friction over the domestic prosecution of former president Jair Bolsonaro, not a straightforward trade imbalance.
The BBC's Brazilian service notes Canada sells about 70% of everything it exports to the United States and is the top buyer for 26 US states, giving it negotiating leverage that smaller partners like Brazil lack. Canadian Finance Minister François-Philippe Champagne said the retaliation package, paired with a C$7.5 billion support program for workers and businesses, was designed to pressure Washington while limiting the impact on Canadian consumers. Economist Trevor Tombe of the University of Calgary estimates that keeping the US tariffs at 50% could put more than 87,000 Canadian jobs at risk, a figure that illustrates the cost of the escalation for an economy far more exposed to the American market than Brazil's.
Brazil and the United States are expected to resume talks over the tariff dispute at a meeting scheduled for next Monday, according to Folha. Until then, trade analysts are watching closely how far the precedent set by the untested use of Section 338 against Canada could go, seeing the episode as a test of how willing the US government is to extend little-used tariff tools against other countries, Brazil among them.