Trade relations between the United States and Canada have come under renewed pressure after the US implemented a ban on nearly $1bn worth of Canadian products, including alcoholic beverages, dairy goods and motorcycles.
The measure, which took effect early Tuesday, represents another escalation in President Donald Trump’s second-term trade dispute with the United States’ longtime northern neighbour.
Although the banned products account for only a small fraction of the roughly $880bn in annual two-way trade between both countries, trade attorney Patrick Childress said the decision was unlikely to ease the ongoing tensions.
The Holland & Knight partner and former US trade official said the import restrictions “certainly won’t do anything to help the trade tensions between the United States and Canada.”
The latest dispute followed Trump’s decision over the summer to invoke a law dating back to the Great Depression and impose 50 per cent tariffs on about $20bn worth of Canadian goods.
The US administration accused Canada of discriminating against American dairy, automobile and alcoholic beverage producers.
Canada responded by imposing tariffs of 15 per cent, 25 per cent or 50 per cent on corresponding US products.
Trump subsequently ordered restrictions on selected Canadian imports as a response to Canada’s retaliatory tariffs. The ban came into effect at 12:01 a.m. Eastern time on Tuesday.
However, the economic consequences could be limited because many of the affected products were already subject to high US tariffs.
Childress said, “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.”
Jacob Jensen, director of trade policy at the centre-right American Action Forum think tank, estimated that the newly prohibited products were worth about $967m based on 2025 trade figures.
Alcoholic beverages account for approximately 87 per cent of the value, with the products targeted after some Canadian provinces responded to Trump’s tariff measures by removing American alcoholic drinks from store shelves.
The affected beverages include beer, various spirits, sparkling wine, brandy and sake.
Certain dairy products are also covered by the restrictions, including whey, a byproduct of milk.
The US and Canada have a longstanding disagreement over Ottawa’s protection of its dairy sector. Canada imposes higher tariffs on some foreign dairy imports after they exceed specified quotas.
Motorcycles are among the other products affected by the ban.
Bombardier Recreational Products, based in Quebec, confirmed that its three-wheel Can-Am Spyder and Canyon motorcycles “will be excluded from importation into the U.S.”
However, the company said the immediate effect would probably be limited because most production and shipments for the current season had already been completed.
Jensen described the latest measure as another step in the escalating trade dispute and warned that it could trigger another response from Canada.
“This marks yet another escalation in the trade war that may result in further retaliation on the Canadian side,” Jensen said.
He added that Canadian exporters and US importers “impacted by these bans will be highly motivated” to push trade officials in both countries towards a “resolution of this whole ordeal.”
The worsening dispute also creates uncertainty around efforts to renew the United States-Mexico-Canada Agreement, the North American trade pact negotiated during Trump’s first term.
The agreement was designed to allow most goods to move across the three countries without tariffs. However, Trump’s return to the White House has been followed by several new tariff measures that have raised questions about the future of regional trade.
Canada has been a particular focus of Trump’s trade policies, with the US president also encouraging Canadian manufacturing companies to move production to the United States.
His repeated suggestion that Canada could become the 51st US state has also generated strong reactions in Canada.
Canadian Prime Minister Mark Carney came to office last year promising to respond firmly to Trump’s policies.
Alongside retaliatory tariffs, his government has been working to reduce Canada’s dependence on the US market, which accounted for more than 70 per cent of Canadian exports last year.
“There is now a price to be paid for access to the United States market,” Carney said earlier this month.
The prime minister has also set an objective of doubling Canada’s non-US trade over the next decade and has supported closer economic ties with other countries.
Carney has backed the possibility of Canada becoming the European Union’s first associate member.
He also said last week that negotiations between Canada and India were making “good progress”, with both sides hoping to conclude discussions by the G20 summit in mid-December.
Earlier this year, Carney also reached an agreement with China allowing a limited number of Chinese electric vehicles into Canada at a reduced tariff, in exchange for China lowering tariffs on Canadian canola.
Gabriel Brunet, a spokesman for Canada-US Trade Minister Dominic LeBlanc, said Ottawa had taken note of the new US measures.
“We take note of the coming into force of the Administration’s previously announced trade measures,” Brunet said.
“Our first priority remains on protecting and supporting Canadian workers, farmers, families, and businesses from these unjustified actions. Our core focus is on what we can control: building strength at home, diversifying our partnerships abroad, and building Canada strong for all Canadians.”
Trump, however, said he expected Canada to eventually seek a deal with the US.
“They’re gonna come in and they’re gonna say, ‘Sir, we are sorry,’” he told reporters at the White House on Monday. “They’ve treated the United States very, very badly. I think a deal will be made but it’s gonna be fair.”
“The problem is that they’ve treated the United States very unfairly. They have been one of the worst countries in the entire world,” the president said.
Childress said the dispute could persist for months rather than weeks, arguing that the tariffs and import restrictions imposed so far may not create enough economic disruption to push either side back to negotiations.
