US escalates Canada trade war with product bans, new tariffs

The US has sharply escalated its trade fight with Canada, moving beyond tariffs to outright bans on some Canadian products while adding new 50% duties on others. The measures follow Canada’s own retaliation after trade negotiations collapsed in August.

Alcohol, Dairy and Motorcycles Face Bans

President Donald Trump announced bans on imports including certain whey proteins, rye whisky and other liquors, beer, wine, non-alcoholic beer and motorcycles.

The bans are scheduled to take effect on September 29, effectively shutting those Canadian products out of the US market rather than simply making them more expensive.

Washington also expanded its Section 338 tariffs to products including certain cheeses, animal hides, motorboats, aluminium and paper goods, golf carts and mattresses. Those duties will stack on top of some existing industry tariffs.

At the same time, products including salt, toilet paper, bed sheets and some large-volume whisky shipments were removed from the tariff list.

Canada Is Fighting Back

Canada has already imposed retaliatory tariffs ranging from 15% to 50% on nearly $20 billion of US goods, including motorcycles, cosmetics, cheese and other consumer products.

The government also increased tariffs on many US steel products to 50% from 25%. Prime Minister Mark Carney has promised a “dollar-for-dollar” response to Washington’s measures.

Trump’s threat to raise tariffs on Canadian automobiles to 50% from January 1, 2027 also remains in place.

A Bigger Risk for North American Trade

The dispute now goes well beyond the roughly $20 billion of Canadian products initially targeted by Section 338 measures. Before the latest changes, those tariffs covered about 5.3% of US imports from Canada.

The bigger concern is uncertainty for closely connected US-Canadian supply chains, particularly in autos, steel, agriculture and consumer goods. Outright import bans also represent a more aggressive tool than normal tariffs and could encourage further retaliation from Ottawa.