From 29 September, the United States will ban the import of a wide range of goods from Canada, including alcoholic drinks, motorbikes and certain food products. The White House announced the restrictions a few hours after Canadian tariffs on US goods, with an estimated value of $20 billion, came into force. This new move escalates the trade dispute between the two countries.
Briefly about the main points
- The US restrictions will come into force on 29 September.
- Alcohol, motorbikes and certain food items have been banned.
- A 50 per cent duty has been imposed on a range of Canadian cheeses.
- On 8 September, Ottawa imposed tariffs 15–50% on US products.
- The US administration is maintaining its threat to raise tariffs on cars to 50%.
Alcohol and foodstuffs have been included in the ban, and a duty will be levied on cheese
According to White House documents, the import ban will cover beer, various types of wine, whisky and bourbon, rum, vodka, vermouth, tequila, mezcal and brandy. The list also includes whey protein, molasses and non-alcoholic beer.
A different regime will apply to a number of US cheeses: their import will not be banned, but they will be subject to a 50 per cent duty. The tariff lists also include certain products made from paper, aluminium and wood, as well as furniture and lighting equipment.
Ottawa responded with tariffs following the breakdown of negotiations in August
Canadian counter-duty came into force on 8 September. The tariffs range from 15% to 50%, and the measures affect US goods worth approximately $20 billion — including steel, furniture, clothing, electronics and other products.
Ottawa described the decision as a response to the US tariffs imposed in August following several fruitless rounds of negotiations. The Prime Minister Mark Carney stated that Canada needs to prepare for an economic reorientation and a reduction in its dependence on the US, although such a course of action will come at a price.
The threat of 50 per cent tariffs on cars remains in place
A spokesperson for the US administration confirmed that the announcement Donald Trump The threat to increase the tariff on Canadian cars from 25% to 50% from 1 January has not been withdrawn. The automotive sector is particularly vulnerable due to the closely integrated production chains between the two countries.
Trump also stated that Bombardier would not be able to sell aircraft in the US unless it began manufacturing them on American soil. Separately, the president ordered a review of government procurement and the removal of Canadian goods from federal catalogues unless Ottawa restores, in his words, «full and fair reciprocity».
The escalation is putting pressure on the USMCA free trade regime
The US, Canada and Mexico are bound by the USMCA, which replaced NAFTA and provides duty-free access for a significant proportion of regional trade. This year, around 68% of Canadian exports were destined for the US, and approximately 80% of this volume passed through customs duty-free thanks to the agreement.
The current US tariffs were introduced under a different legal procedure, which prevents Canada from taking full advantage of the USMCA exemptions. Economists fear that further moves by the parties could undermine business confidence in the agreement and force companies to rethink their long-standing supply chains.
Canada is banking on political pressure, whilst businesses are already looking for alternatives
Some of the Canadian tariffs were designed to put pressure on US manufacturers in Michigan and Ohio in the run-up to the US mid-term congressional elections in November. The Canadian minister responsible for trade with the US, Dominique Leblanc is in contact with the US Trade Representative, Jamison Greer, in an effort to find a way out of the conflict.
Tariff risks are already influencing corporate decisions. Japan’s Sapporo, which owns Canada’s Sleeman Breweries, is considering relocating part of its soft drinks production from Canada to the US. According to an Angus Reid poll, 62% of respondents approve of Carney’s work, whilst around 20% of Americans support Trump’s tariffs on Canadian goods.
