The United States banned a broad range of Canadian products, including alcoholic beverages, motorcycles and dairy goods, on Tuesday, deepening an increasingly hostile trade dispute between the two countries.
The restrictions take effect on September 29 and were published on the White House website shortly after Canada’s retaliatory tariffs on US goods came into force just after midnight on Tuesday.
Canada’s measures followed 50% tariffs imposed by Washington last month on roughly $20 billion worth of Canadian products, after several rounds of negotiations failed to produce an agreement.
The breakdown in talks has intensified tensions between longtime allies, who have traded blame for the failed negotiations. It has also encouraged Canadian Prime Minister Mark Carney to call for further efforts to reduce dependence on Canada’s largest trading partner and raised fresh doubts about the future of the US-Mexico-Canada Agreement.
Carney said in a video posted Tuesday that Canada has the resources to redirect its economy and thrive. He warned, however, that changing course would carry a cost—one that he argued was far smaller than the price of inaction.
The US import restrictions cover most alcohol products, including beer, wine, whisky, bourbon, rum, vodka, vermouth, tequila, mezcal and brandy. Separate restrictions apply to whey protein, invert molasses, cane molasses and non-alcoholic beer.
Several categories of cheese were also added to a list of Canadian products subject to a 50% tariff, though they were not barred completely. Paper, aluminium, wood products, furniture, lighting equipment and other goods were included as well.
A US official said President Donald Trump’s earlier announcement that tariffs on Canadian vehicles would rise from 25% to 50% on January 1 remained in place. The official said US Trade Representative Jamieson Greer and Dominic LeBlanc, Canada’s minister responsible for bilateral US trade, have spoken several times in recent days and are expected to continue discussions aimed at finding an alternative course.
LeBlanc criticized the latest US measures in a Tuesday night social media post and said he remains in contact with Greer over possible next steps.
He said Canada’s first priority continues to be protecting and supporting Canadian workers, farmers, families and businesses from what Ottawa considers unjustified actions.
Ottawa responds
Canadian officials said Ottawa’s countermeasures were intended to bring economic and political pressure to bear on Washington. They subsequently triggered the US response announced Tuesday night.
The retaliatory duties cover approximately $20 billion in US exports and range from 15% to 50%, depending on the product. They affect goods including steel, furniture, clothing and electronics, while also targeting industries in politically competitive states such as Michigan and Ohio ahead of the November US midterm elections.
Although the tariffs represent a relatively small share of total US-Canada trade, analysts warn that the escalating dispute could undermine the USMCA, the free-trade agreement that replaced NAFTA and has supported commerce across North America for decades.
Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and a member of Carney’s advisory committee on bilateral US economic relations, said Canada’s main concern is the possibility of a retaliatory cycle in which each side imposes progressively harsher measures.
He added, however, that Ottawa needs to identify areas where it can exert leverage in response to the US actions.
Trump has also directed a series of attacks at Canada on his Truth Social platform in recent days.
On Monday, he said Bombardier, the Canadian manufacturer of private jets, would be barred from selling aircraft in the United States unless it began producing them domestically.
He also shared an image of North America beneath a US flag, encompassing Canada and Mexico, along with an AI-generated picture continuing his long-running mockery of Carney by calling him “Governor”—a reference to Trump’s repeated suggestion that Canada become the 51st US state.
Hours before the new import restrictions took effect, Trump ordered the General Services Administration to coordinate with the US Trade Representative and remove Canadian-origin products from the federal government’s Multiple Award Schedules unless Ottawa restored “full and fair reciprocity for American Farmers and Companies.”
Trade restrictions affect multiple sectors
Last month’s tariffs targeted Canadian exports including wine, furniture, dairy, cement, clothing, fishing rods and hockey equipment. The measures cover approximately $20 billion, or 5%, of Canada’s exports to the US.
Government data show that Canada has sent nearly 68% of its total exports to the US so far this year. Around 80% of those shipments entered duty-free under exemptions contained in the USMCA, whose safeguards have provided the Canadian economy with some resilience.
The tariffs were imposed under a Depression-era US trade law, however, which prevents Ottawa from invoking corresponding USMCA exemptions.
Fears about the pact’s stability are increasing uncertainty around investment and economic growth as Canada confronts a trade dispute with an economy roughly 13 times its size.
Polls indicate that Carney retains broad support among Canadians, although political analysts say that backing could erode within months as the economic effects of the trade war become more pronounced.
An Angus Reid poll published Tuesday found that approval of Carney’s performance rose by 11 points from August, reaching 62%.
By contrast, only 20% of Americans approved of Trump’s tariffs on Canadian goods, according to a Reuters/Ipsos poll.
Trump threatened last month to increase US duties on all vehicles and automotive parts from Canada to 50% beginning January 1. He also signed an executive order renaming Lake Ontario as Lake America.