The tariff war has cost US border towns thousands of jobs, and the damage will be hard to undo
by Philip Luck, Aug. 10, 2026
On July 20, 2026, the Trump administration escalated what has become an eighteen-month coercion campaign against its northern neighbour, announcing 50 percent tariffs on roughly $20 billion in Canadian imports under Section 338 of the Tariff Act of 1930, a provision dormant since the 1940s. Targeted goods include alcoholic beverages, dairy, and a range of other products. The stated justification: “punishment” for Canada’s retaliatory measures against American motor vehicles, dairy, and alcohol, which include provincial liquor delistings between March 2025 and February 2026.
The announced Section 338 tariffs impose levies on goods that were not touched by previous rounds of tariffs since they were covered by the Canada–United States–Mexico Agreement (CUSMA). With negotiations to revise the CUSMA set to occur this week, the tariffs appear intended to force Canada to submit to the president’s desired changes.
In using duty-free CUSMA goods as negotiating leverage, the move revives a broader concern—the cost to the United States’ economic statecraft of using tariffs coercively. But it’s worth interrogating this strategy from a different angle: examining the limits of coercion as a tactic and measuring the costs these actions impose on the American people, many of them concentrated in local economies most tied to the US’s northern neighbour.
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Source: The Walrus
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