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BackUS bans Canadian spirits, dairy and motorbikes as trade war escalates
US bans Canadian spirits, dairy and motorbikes as trade war escalates
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BBC World29 minutes agoBusiness2 min read

US bans Canadian spirits, dairy and motorbikes as trade war escalates

Quick Look

The United States has banned imports of Canadian alcoholic spirits, dairy goods and motorbikes in response to Canada's retaliatory tariffs on US goods, marking the latest escalation in a months-long trade war between the two historically close allies, with both sides expressing willingness to negotiate but no new talks scheduled since negotiations collapsed in late August.

AI-generated summary

Why It Matters

The US and Canada have historically been close allies and key trading partners, with over two-thirds of Canada's exports going to the US and Canada being the US's second-largest trading partner after Mexico. The current trade war began after negotiations collapsed in late August, following earlier US tariffs on $20bn of Canadian goods and Canadian dollar-for-dollar retaliatory measures.

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The US is banning a slew of Canadian products, including alcoholic spirits, dairy goods and motorbikes, as its neighbour's retaliatory tariffs on American goods come into force.

In a series of executive orders on Tuesday, US President Donald Trump said that Canada is "discriminating" against the US and outlined the import ban, which will begin 29 September.

Earlier on Tuesday, Canada Prime Minister Mark Carney said in a video address that his country's pivot away from the US as its largest trading partner "will come at a cost".

Both US and Canadian officials have said they would like to strike a trade deal, but no new talks have been scheduled since negotiations collapsed in late August.

The BBC has contacted Carney's office for comment.

The White House's new sanctions are the latest strike in a months-long trade war between the US and Canada. The sides have historically been close allies, with each a key business partner to the other.

Generally more than two-thirds of Canada's total exports go to its neighbour.

On the other hand, Canada is the second-largest trading partner of the US, after Mexico, although its exports are far more diversified.

Business owners on both sides of the border have expressed fears over the trade war's fallout. Many expect prices of goods to rise and the number of customers to fall.

Last month, the White House imposed 50% tariffs on around $20bn (£14.8bn) of Canadian goods after several rounds of talks had broken down.

Those tariffs hit sectors including Canada's furniture and wine industries, as well as sporting and fishing equipment businesses.

Canada responded with dollar-for-dollar tariffs on US goods like steel, clothing and furniture. The counter-duties came into effect after midnight on Tuesday.

Canada is "discriminating" against US businesses by restricting US goods while not doing the same to the same products from other countries, the White House said when announcing the new import restrictions on Tuesday.

Some products, like whey and non-alcoholic beer, have been banned from import entirely, while import taxes have been further hiked for others, including cheeses and motorboats.

On Monday, Trump hinted at more trade restrictions to come, warning Canadian aircraft company Bombardier that it would no longer be able to sell its products in the US unless it moves manufacturing there.

Trump has long believed that tariffs will help reduce trade imbalances between the US and other countries, but his wide-ranging tariffs scheme has upset many of the States' traditional allies.

Some Canadians have led a massive boycott of US products like alcohol, which have vanished from some store shelves after Trump launched his global tariff campaign last year.

Trade expert Deborah Elms, from the Hinrich Foundation, told the BBC the import ban could have a "strong" impact on any Canadian business with US buyers, though early estimates show a "modest impact" affecting around $1bn worth goods.

Canada will likely "hold course for now" and adjust their business support measures to account for the US' latest moves, Elms said.

"The bigger question is what it will take for the two sides to sit back down together. The language in these proclamations, as an example, isn't helpful in getting to the negotiating table," she added.

What to Watch

AI outlook — possibilities, not facts

  • The US and Canada will resume trade negotiations within the next 4-8 weeks

    Likely · Within weeks

  • Canada will maintain its current retaliatory tariff levels unless the US lifts its import bans

    Likely · Within weeks

Open Questions

  • Will the US and Canada resume trade negotiations, and if so, when?
  • What specific criteria will determine whether companies like Bombardier can maintain US market access?
  • How will the trade restrictions affect consumer prices and employment in border communities?
  • Are additional product categories likely to be targeted in future trade actions by either side?

Related Topics

This article was originally published by BBC World.

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