US ban on Canadian imports likely to weaken already fragile relationship

It marks another ratcheting up of Trump’s trade war and affects nearly $1bn in imports of a $880bn trade relationship

US- Canada relations, already tense, are likely to deteriorate further after the United States went ahead early on Tuesday with a decision to ban nearly $1bn worth of Canadian imports, including alcoholic beverages, dairy products and motorcycles.

The ban amounts to barely a ripple in $880bn worth of annual two-way trade between the two northern neighbors. But it marks another ratcheting up of Donald Trump ’s second-term trade war with the US’s longtime ally and trading partner.

The import ban “certainly won’t do anything to help the trade tensions between the United States and Canada’,’ said trade attorney Patrick Childress, a partner at Holland + Knight and a former US trade official.

The latest sparring began over the summer when Trump reached back to a Great Depression law to impose 50% tariffs on about $20bn worth of Canadian imports, charging that Canada discriminates against US dairy, auto and alcoholic beverage producers. Canada promptly counterpunched with tariffs of 15%, 25% or 50%, matching US imports dollar for dollar.

To punish Canada for retaliating against his tariffs, Trump decided to ban a list of Canadian products, effective 12.01 am Eastern time Tuesday.

The economic impact is likely to be minimal. Childress noted that the products on the banned list were already facing Trump’s tariffs. “For a lot of these goods, the 50% was already acting as a de facto ban by making importation from Canada into the United States uneconomical,″ he said.

Jacob Jensen, director of trade policy at the center-right American Action Forum thinktank, calculates that the ban would cover $967m worth of Canadian imports, based on 2025 numbers. Of that, 87% would be alcoholic beverages that the US targeted because of some Canadian provinces responding to Trump’s provocations by banning US booze from store shelves.

Also banned are some dairy products, including the milk byproduct whey. The two countries have long clashed over Canada’s attempts to protect its dairy industry from foreign competition by imposing hefty tariffs once dairy imports have exceeded a quota.

The ban also covers motorcycles. Bombardier Recreational Products (BRP) in Quebec confirmed that its three-wheel Can-Am Spyder and Canyon motorcycles “will be excluded from importation into the US’’. But BRP said the impact would probably not be felt until next year because it has completed most production and shipments for the current season.

“This marks yet another escalation in the trade war that may result in further retaliation on the Canadian side,” Jensen said. He expects Canadian exporters and US importers “impacted by these bans will be highly motivated’’ to demand that trade officials on both sides find some way to reach a “resolution of this whole ordeal’’.

The impasse imperils efforts to renew the US-Mexico-Canada Agreement, a North American trade pact Trump pressured the US’s neighbors into accepting in his first term and which he once declared “the most modern, up-to-date, and balanced trade agreement in the history of our country’’.

The deal allowed most goods to cross North American borders duty free. But since returning to the White House last year, Trump has announced a series of tariffs that have clouded the future of trade in the region.

Trump has directed most of his ire at Canada. He is openly seeking to pull Canadian manufacturing south. And he has inflamed public opinion in Canada by repeatedly suggesting that the country become the US’s 51st state.

The Canadian prime minister, Mark Carney , came to power last year on a promise to stand up to Trump. In addition to retaliating against Trump tariffs, Carney has sought to reduce Canada’s reliance on the United States, which last year accounted for more than 70% of Canadian exports.

“There is now a price to be paid for access to the United States market,” Carney said earlier this month. Carney has embraced the prospect of Canada becoming the European Union’s first associate member.