The trade dispute between the United States and Canada has intensified after Washington announced new import restrictions on a wide range of Canadian products.
The latest US measures target alcoholic beverages, motorcycles and several dairy-related products. They are scheduled to take effect on September 29.
The decision came hours after Canada imposed retaliatory tariffs on US products, deepening tensions between the two longtime trading partners.
Canadian Prime Minister Mark Carney said the country was prepared to reduce its dependence on the US market despite the economic costs.
“We have everything we need to pivot and prosper,” Carney said in a video message. He acknowledged that changing Canada’s trade direction would come with costs but argued that remaining dependent on the US market could be more costly.
Washington Expands Import Restrictions
The latest US measures cover a broad range of alcoholic products. These include beer, wine, whisky, bourbon, rum, vodka, vermouth, tequila, mezcal and brandy.
Several dairy-related products have also been targeted. The list includes whey protein, invert molasses, cane molasses and non-alcoholic beer.
Washington has also added various cheese products to a list facing a 50% tariff rather than an outright import ban.
Other products affected by the expanded measures include paper, aluminium, wood, furniture and lighting products.
A US official also confirmed that President Donald Trump’s threat to increase tariffs on Canadian automobiles remains in place. The proposed tariff could rise from 25% to 50% from January 1.
US Trade Representative Jamieson Greer has remained in contact with Canadian officials. Further discussions are expected as both sides explore whether an alternative path can prevent the dispute from escalating further.
Canada Retaliates Against US Goods
Canada introduced its latest retaliatory measures after Washington imposed additional tariffs on Canadian goods.
The Canadian tariffs cover around $20 billion worth of US products. Duties range from 15% to 50% and affect sectors including steel, furniture, clothing and electronics.
Canadian officials say the measures are designed to increase economic and political pressure on Washington.
The dispute has raised concerns about the future of the United States-Mexico-Canada Agreement, the North American trade pact that replaced NAFTA.
The agreement has supported cross-border trade for decades and provides duty-free treatment for many qualifying products.
Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance, warned that the two countries could enter an “escalatory spiral”. He said Ottawa also needed to identify areas where it could exert economic pressure on Washington.
Trade War Threatens North American Economy
The latest confrontation is particularly significant for Canada because the US remains its dominant export market.
Canadian and US government data show that almost 68% of Canada’s total exports have gone to the United States this year. Around 80% of those exports have moved duty-free under USMCA arrangements.
The new trade restrictions have increased uncertainty for Canadian businesses and investors.
Analysts fear prolonged tensions could weaken investment, economic growth and cross-border supply chains.
Canada is also confronting a major imbalance in economic size. The US economy is roughly 13 times larger, increasing the potential impact of a prolonged trade conflict on the Canadian economy.
Canadian political analysts have warned that Prime Minister Carney’s strong public support could weaken if consumers and businesses begin feeling the effects of higher trade barriers.
However, an Angus Reid poll released Tuesday showed Carney’s approval rating rising 11 points to 62%.
In the United States, a Reuters/Ipsos poll found that only 20% of Americans approved of Trump’s tariffs on Canadian goods.
Trump Escalates Pressure on Ottawa
Trump has intensified his criticism of Canada in recent days.
He recently said Canadian aircraft manufacturer Bombardier would no longer be allowed to sell its planes in the US unless production was shifted to American facilities.
He also directed the General Services Administration to coordinate with the US Trade Representative to remove Canadian-origin products from federal procurement schedules unless Canada restores what Washington considers fair trade access.
The dispute has also taken on a political dimension. Trump has repeatedly suggested that Canada could become the 51st US state and has used the term “Governor” when referring to Carney.
Last month, Washington imposed tariffs covering Canadian products including wine, furniture, dairy goods, cement, clothing, fishing rods and hockey equipment.
Trump has separately threatened to raise tariffs on Canadian cars, trucks and automotive parts to 50% from January 1.
With both governments continuing to impose new trade barriers, businesses across North America now face growing uncertainty over the future of the continent’s integrated trading system.
