US widens Canada trade war with import bans, new tariffs on key products

By Alicia Diaz and Josh Wingrove

 

The US escalated its trade war with Canada following Ottawa’s tariff retaliation, moving to block imports of some products while slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to government contractors.

 

The measures announced by the Trump administration in a series of proclamations on Tuesday include bans on whey proteins, certain rye whiskies and other liquors, malt beer and certain grape wines, non-alcoholic beer and motorcycles. President Donald Trump had earlier hinted at the move in response to bans on US alcohol products by several Canadian provinces.

 

Trump also expanded the Section 338 tariffs — a power dating back to a Depression-era Smoot-Hawley tariff law that was first tested in August — by extending them to certain cheeses, animal hides, motorboats, certain aluminum and paper products, golf carts and mattresses.

 

 

The import bans for some Canadian dairy products and alcohol will take effect in three weeks, a senior administration official told reporters. Modifications to the Section 338 tariffs will come into force in one week. A White House fact sheet said the new tariffs would stack on top of the industry-specific duties already in place.

 

But the Trump administration also excluded some products that had earlier been hit with the Section 338 tariffs, including salt, toilet paper, bed sheets, and whiskies and liqueurs in containers over four liters in size.

 

Meanwhile, the senior administration official said Trump’s threats to increase Canadian auto tariffs to 50% on January 1 remain in place. The official also said they expect to have a conversation with their Canadian counterparts in the coming days.

 

US Trade Representative Jamieson Greer called the latest US measures a “natural consequence of Canada’s continued discriminatory treatment of crucial American exports, ranging from alcoholic beverages to dairy products to motor vehicles.” 

 

“President Trump will continue to leverage the tools at his disposal to defend the interests of American workers and exporters, and restore reciprocity in our bilateral trade relationships,” he said in a statement.

 

Dominic LeBlanc, the minister responsible for Canada’s trade with the US, said he is in contact with Greer and that Ottawa is assessing Washington’s latest move.

 

“When the US is ready to engage, our government will work in good faith and constructively towards a more secure mutually beneficial trading relationship that fully respects Canadian sovereignty,” he said in a social media post.

 

In a Truth Social post earlier Tuesday, Trump also announced he would cut Canadian goods from US government buyers “unless Canada restores full and fair reciprocity for American Farmers and Companies.”

 

Trump said Canadian goods and services sold under the so-called Multiple Award Schedule are worth more than $50 billion each year. The senior official later clarified that although the White House calculates the US procurement market at that amount, Canadian companies don’t always account for all of it.

 

The US president’s actions are the latest salvo in a trade fight that has expanded well beyond tariffs. Talks between the US and Canada on a trade truce collapsed at the last minute in August, leading the Trump administration to follow through with a 50% tariff on billions in Canadian goods. 

 

Trump has since ordered Lake Ontario be renamed Lake America, prompting an outcry from Canadians and even some Republican allies at home. He’s also threatened to end sales of Canada-based Bombardier Inc. jets in the US and raised questions over the value of Canada’s currency.

 

Canada’s Prime Minister Mark Carney has refused to back down. After the trade talks collapsed, he vowed to retaliate “dollar-for-dollar,” and on Tuesday counter-tariffs on hundreds of US consumer goods, including motorcycles, cosmetics and cheese, went into effect. Carney’s government also increased duties on many US steel items to 50% from 25%.

 

The Canadian retaliatory duties threaten to wreak havoc on closely integrated supply chains, impacting key industries including auto manufacturing. The US and Canada have been top trading partners for years, and the political stakes from an extended trade fight for both Carney and Trump are high.

 

Canada’s measures could have a particularly damaging impact in states such as Michigan and Ohio that also boast key races in November’s midterm elections to determine control of the US Congress. Trump is already facing voter angst over his economic agenda and a war with Iran that has caused energy prices to spike.

 

In a statement on Tuesday, the Canadian Chamber of Commerce said the US is “punishing Canada — by punishing themselves — for the whole world to see” with its latest trade measures.

 

“Ultimately, we will end up back at the table because the math is the same. Together, we’re stronger. Apart, we’re weaker,” said Candice Laing, the chamber’s president and CEO. “It will be on the US government to justify to its businesses, workers and communities the price for them of going it alone and paying more to do it.” 

 

Officials negotiated for weeks after Trump threatened to impose tariffs on Canada under a never-before-used authority. Since then, both countries have blamed each other for the intensifying trade fight, trading sharp rhetoric and in some cases insults.

 

The threat against Bombardier prompted concern from Republican Senator Jerry Moran, who said in a post on X he reached out to the Trump administration “to make certain the President is aware of the significant contributions of Bombardier to Kansas,” including with jobs.

 

Bombardier has sought to ease tensions, noting that it’s a major contributor to the US aerospace sector with employees in more than 20 states. The company also touted plans to inaugurate a new facility in Fort Wayne, Indiana, this year.

 

The trade war has already had ripple effects. Sapporo Breweries Ltd. is moving some production to the US from Canada because of the 50% tariffs imposed on beer exports from the country.