The United States escalated its trade war with Canada on Tuesday, banning imports of select alcohol, dairy-related and motor-vehicle goods while extending a 50% retaliatory tariff to a wider range of imports, including specialty cheeses, boats and furniture.
U.S. President Donald Trump enacted the measures through five proclamations issued the same day Canada began charging tariffs of up to 50% on a range of U.S. goods, matching rates the Trump administration has imposed.
The import bans, starting Sept. 29, include motorcycles, mopeds and cycles fitted with internal-combustion piston engines of a cylinder capacity over 800 cubic centimeters. The bans also apply to beer, wines, cider and other fermented drinks, high-proof beverage alcohol and many major spirits categories, along with whey products, molasses and non-alcoholic beer. The covered goods will continue to face a 50% Section 338 tariff until the import bans take effect.
The products slated for import bans totaled less than $1 billion in trade value, Deborah Elms, trade and economic policy expert at the Hinrich Foundation, said in a LinkedIn post.
Beyond the import exclusions, starting Sept. 15, the list of goods subject to 50% Section 338 tariffs will expand to include specialty cheeses, modified fats/oils, bovine hides and upholstery leather, certain raw and dressed furskins, and recreational motorboats.
Other products now facing a 50% tariff include specialty paper, some steel and aluminum items, metal fittings and welding inputs, golf carts, furniture and lamps. The tariffs apply regardless of whether goods qualify for United States-Canada-Mexico Agreement treatment and stack on existing Section 232 tariffs, per a White House fact sheet.
The tariff changes were “basically a wash” because the Trump administration also removed some goods from Section 338 tariffs, according to Elms. Products removed from the levies included toilet paper, salt, cement and whiskies, liqueurs and cordials in containers of over 4 liters.
"Of course, if your firm produces the goods now added to any list, it’s impactful," Elms said. "But given that [Canada] is the largest trading partner for the US, even big scary numbers of tariff damage are actually very modest."
In addition to expanding tariffs and banning some goods from Canada, Trump directed the U.S. Trade Representative and the administrator of the General Services Administration to remove $50 billion worth of Canada products from the GSA’s Multiple Award Schedules, per the fact sheet, which links to a Truth Social post from the president. The MAS provides federal, state, local and tribal governments access to commercial products and services.
The latest measures followed what Trump described as Canada’s discrimination against U.S. commerce in three sectors: alcoholic beverages, dairy and motor vehicles. The president contends Canada's federal and provincial policies unfairly disadvantage U.S. goods compared with those from other countries, per the proclamations.
The escalating trade dispute began in earnest following failed negotiations last month over 50% tariffs Trump announced in July, with each side blaming the other for the breakdown.
After Canada Prime Minister Mark Carney called back negotiators, Trump imposed the 50% tariffs on $20 billion worth of Canada imports, including raw agricultural and natural materials, chemicals, textiles, consumer goods, wood products, paper, machinery and tools.
Canada retaliated with duties on roughly the same value of U.S. goods, matching the rates the Trump administration imposed. The levies, which went into effect Tuesday, target steel, dairy products, appliances, agricultural equipment, electronics and pulp and paper.
