Morning. So much for literally bridging a divide. In focus today, we look at how U.S. President Donald Trump is ramping up his trade war with Canada, just days after winning a concession over a major new border crossing.

Mideast: Iran attacked a tanker in the Strait of Hormuz early today, while the United States conducted yet another round of air strikes targeting the Islamic Republic. Earlier, Iran-backed rebels in Yemen said they planned to prevent Saudi Arabia from shipping in the Red Sea.

Trade: Carney offered to double oil exports to U.S. as part of potential deal, Hoekstra says.

Economy: Bulk investor buying helps resuscitate condo purchases in the Toronto region.

Less than five days after winning a deal that secured immediate revenues from Canada’s new $6.4-billion bridge to Michigan, the White House is striking out at Canada over autos, alcohol and cheese.

In three proclamations signed late yesterday, Donald Trump became the first U.S. President to invoke a section of the Tariff Act of 1930 allowing him to impose sweeping retaliatory duties on any nation deemed to be treating American commerce unfairly.

Why now?

The administration noted that Canada was one of the only countries other than China that retaliated against Trump’s previous tariffs and must be held accountable. I would note that Canada is the only other country sharing the world’s longest undefended border and decades of free trade built upon increasingly integrated manufacturing sectors, so the stakes are somewhat higher.

Trump also complained on Friday about smoke from Canadian wildfires hanging over American cities. He said he raised the matter with Prime Minister Mark Carney at Sunday’s World Cup final.

The tariffs take effect on Aug. 19 and will not include an exemption for goods trading under the United States-Mexico-Canada Agreement.

What the new tariffs cover

If you had to read that last sentence a few times, you are not alone. And I wrote it! The trade deal remains in place, even after the U.S. said earlier this month it will not renew the continental free-trade agreement for another 16-year period.

But Section 338 allows the White House to penalize countries it deems to be discriminating against American commerce – removing a key protection for Canadian exporters throughout the dispute.

Affected products include wine, hockey sticks and cement. It’s a long list – and one bound to spark more uncertainty and confusion – but not necessarily curtains for the Canadian economy.

U.S. Trade Representative Jamieson Greer’s office said the tariffs would apply to nearly US$20-billion worth of Canadian goods, roughly five per cent of the country’s exports to the U.S. That means the average tariff rate applied to Canadian products could rise by just over two percentage points.

“This would undoubtedly be painful for the affected Canadian industrial sectors, but should be substantially less damaging to the economy than initially feared,” Corpay chief market strategist Karl Schamotta wrote last night in a research note to clients.

What’s still protected

The tariffs will not apply to oil, gas, potash, fish or critical minerals, even though energy is the main source of the U.S.’s goods trade deficit with Canada, The Globe’s team reports.

The disputes

The Trump trade team has been focused on a few bugaboos:

• Booze: Washington is taking aim at provinces – specifically Ontario and Quebec – over their refusal to sell U.S. wine and spirits.
• Cars: The White House says Canadian imports of U.S. vehicles dropped 22 per cent after Ottawa rolled out its own retaliatory taxes on American-made autos.
• Dairy: The taxes on Canada’s supply-management system are aimed at rules that limit U.S. companies from accessing duty-free cheese quotas – perhaps Trump’s longest-held trade grievance.

But, what about the bridge deal?

A 15-year side deal struck last week by Canada and the U.S. on the new Gordie Howe International Bridge will see Ottawa cut Washington cheques that amount to half the toll revenues minus operating costs for the span connecting Windsor and Detroit.

The multibillion-dollar bridge, financed solely by Canada, is slated to open on July 27. After stalling its opening for months, Trump called the profit-sharing arrangement a “MUCH BETTER DEAL for America” on social media.