President Trump is invoking an unused provision of the 1930 Smoot-Hawley Tariff Act to impose additional tariffs on Canada over alleged discrimination against U.S. exports.Why it matters: As the Supreme Court limits Trump's ability to wield tariffs and a temporary tariff stopgap expires, the president is turning to a rarely used tariff authority. While the Smoot-Hawley Act is often blamed for worsening the Great Depression, this provision went unused — until now.Driving the news: Trump on Monday announced an additional 50% tariff on select Canadian imports that would take effect in August under Section 338 of the Tariff Act of 1930, better known as the Smoot-Hawley Tariff Act after its congressional sponsors.The administration says the measure responds in part to Canada's retaliation against earlier U.S.
tariffs and will affect about $20 billion in Canadian goods.It is another setback for Canada after the administration declined to immediately renew the current protections and framework of the U.S.-Mexico-Canada Agreement.What they're saying: "Trump's use of Section 338 tariffs on Canadian imports were narrow, targeted, and in response to unfair Canadian trade practices," White House spokesperson Kush Desai tells Axios in an emailed statement."Comparing the President's recent executive action with the full gambit of tariffs enacted in 1930 during the Great Depression is a moronic exercise."Fun fact: Many Americans know the law from the economics classroom scene in "Ferris Bueller's Day Off," where actor Ben Stein lectures on Smoot-Hawley's role in the Great Depression.Here's how the Smoot-Hawley Tariff Act worked:Where did they come from?As the economy deteriorated in 1929, lawmakers moved to protect U.S. industries from foreign competition.Congress passed the Smoot-Hawley Tariff Act of 1930, named for Sen. Willis Hawley (R-Ore.), to protect American farmers from lower-priced imports.Lawmakers later expanded it to cover a broad range of manufactured goods.President Hoover signed the bill into law on June 17, 1930.What did it do?Smoot-Hawley increased the average tariff rate by about 20% and signaled a major expansion of U.S.
protectionism.Within two years, roughly two dozen countries had protested or retaliated with tariffs of their own, helping reduce global trade.One of the hardest-hit industries was U.S.
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