Trump wants to make his trade wall bigger and better than ever before

July 21, 2026 — 12:04pm

As Donald Trump’s latest attempt to rebuild the tariff wall demolished by the US Supreme Court earlier this year goes live, he’s already planning to make it higher.

This was always going to be a significant week for global trade, given that Trump’s temporary replacements for the “Liberation Day” tariffs – the 10 per cent baseline tariffs on almost all imports to the US, which the Supreme Court had ruled illegal in February – are scheduled to expire on Friday.

Those replacement tariffs, using Section 122 of the Trade Act, have themselves been ruled illegal by US courts and the revenue raised may have to be reimbursed. In any event, they could only be imposed for a maximum of 150 days.

That period ends on Friday, and the Trump administration has been racing to get a more permanent replacement in place.

Last month, using a more robust section of the Trade Act, Section 301 (although it, too, might be challenged in the courts) the administration announced it would impose new tariffs of either 10 per cent or 12.5 per cent on 99.4 per cent of all imports to the US, using the pretext that it was a response to inadequate efforts by its trading partners, including Australia, to prevent imports made with forced labour.

Separately, it identified 16 of America’s biggest trading partners – including China, Japan, the European Union, India and South Korea – as potential targets for even higher tariffs, claiming they had excess manufacturing capacity and production that burdened or restricted US commerce.

Trump’s flurry of trade-related actions over the past week shows how committed he is to his misconceived understanding of trade.

Last Friday, Trump announced even more tariffs, this time on Brazil, as retaliation for “unfair” trade practices, with Secretary of State Marco Rubio saying Brazil hadn’t negotiated in good faith and that President Luiz Inacio Lula da Silva was “putting his own ego ahead of making a deal”, which is a bit rich coming from the Trump administration.

Trump originally hit Brazil with 50 per cent tariffs as retaliation for the prosecution of former Brazilian president Jair Bolsonaro, a Trump friend and ally. Those were knocked out by the Supreme Court.

It is revealing – and shows the limitations of Trump’s trade wars – that the latest tariffs will only cover about a third of Brazil’s exports to the US, exempting coffee, orange juice, beef, nuts, honey, tropical fruit, iron and manganese ore, wood pulp, oil and oil products and civil aircraft, among a long list.

The initial tariffs, while they were in place, sent the price of coffee and other groceries soaring in the US, causing a consumer backlash. The administration is clearly trying to avoid a repeat of that experience.

There are some things that the US doesn’t or can’t produce itself, or where it can’t produce enough to meet its domestic demand, or where other countries can produce it more cheaply – something Trump has consistently failed to recognise in his trade wars with the rest of the world.

As if the imminent introduction of the Section 301 tariffs, and the renewed but relatively limited attack on Brazil’s exports weren’t sufficient, on Monday Trump announced new 50 per cent tariffs on Canada, to take effect in 30 days.

Those tariffs are supposedly in response to the actions of Canadian provinces in halting purchases of US alcohol, putting tariffs on US cars and discriminating against US dairy products.

Trump is, however, still seething over the fact that Canada was one of only two countries – China was the other – that retaliated when he imposed his Liberation Day tariffs.

Last week, he even threatened another tariff because wildfires in Canada had resulted in the US being “invaded” by dirty air and pollution, saying the cost of the “pollution” should be added to the existing tariffs. The fact that Canada issued air quality warnings of its own, because of the smoke from US wildfires, seems to have escaped him.

Trump’s latest tariffs will apply to a wide range of Canadian exports, including those covered by the United States-Mexico-Canada Agreement (USMCA). In previous rounds of tariffs, goods complying with the free trade agreement were exempted.

Trump has, of course, given notice that the US will exit the USMCA (which he negotiated in 2018) when it expires in a decade, unless Mexico and Canada negotiate a new deal more favourable to the US.

A third round of negotiations with Mexico is scheduled this week. So far, Canada has had no serious engagement with the US.

The new tariffs could be a crude attempt to gain some leverage over Canada to force it to the table, although its Prime Minister Mark Carney has shown little interest in making concessions to the US.

That the tariffs conflict with the USMCA could easily lead to a deeper trade conflict between the countries, even as Trump weighs up the prospect of reopening hostilities with the European Union.

Officials from his administration are putting together a list of Spanish goods the US could embargo in retaliation for Spain’s refusal to agree to spend 5 per cent of its GDP on defence, which Trump has insisted on. Spain’s government also stopped the US from using military bases within Spain to launch attacks on Iran.

Earlier this month, at the NATO summit, Trump said he hadn’t spoken to Spain. “Spain is a wasted cause,” he said. “We don’t want to any trade business with Spain any more.”

He also instructed US Treasury Secretary Scott Bessent to cut off trade with Spain.

“Take care of ⁠it immediately. Don’t even talk to them. They’re hopeless. They’re bad people,” Trump said. “They make so much money with us, and we’re going to see that they make a lot less.”

The two countries actually don’t trade much with each other – the US imported about $US21 billion of Spanish goods last year and exported about $US26 billion to Spain, so it has a trade surplus with the country – but targeting Spain could blow up the deal the US finally signed with the EU late last month.

The EU takes the view that a threat to one of its 27 members is a threat to all – so, if Trump’s threats against Spain are implemented, the wider trade deal could be jeopardised.

The new tariffs, which may or may not survive the inevitable legal challenges from US importers, are Trump’s final attempt to rebuild his tariff wall through a patchwork of legislative headings that have never previously been used in the way that he proposes.

The statutory authority for the new Canadian tariffs, for instance, is Section 338 of the Tariff Act of 1930, which essentially boils down to the preferential treatment Canada supposedly gives to third countries relative to its treatment of the US. It has never been used before.

It is conceivable that the Section 301 tariffs – which were intended, it seems, for use in bilateral disputes rather than to provide cover for a global tariff regime – could be demolished by the courts. It’s also possible that the Democrats gain control of Congress at the midterm elections and try to rein in Trump’s trade aggression.

Trump’s flurry of trade-related actions over the past week, however, shows how committed he is to his misconceived understanding of trade.

They also highlight his wilful ignorance of who eventually pays his tariffs and the reality that – despite his trade deals and promises that they would lead to massive investment in US manufacturing and a surge in well-paid manufacturing jobs – the manufacturing sector in the US continues to shrink, along with its jobs and real wages.

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