The US has escalated its trade dispute with Canada by banning a wide range of Canadian alcoholic beverages, motorcycles and dairy products from entering the country, with the new measures set to take effect on Sept 29.
The move came shortly after Canada imposed retaliatory tariffs on about US$20 billion worth of American goods, with duties ranging from 15% to 50%.
Washington’s latest restrictions cover most Canadian alcohol products, including beer, wine, whisky, bourbon, rum, vodka, vermouth, tequila, mezcal and brandy. Whey protein, invert molasses, cane molasses and non-alcoholic beer are also among the products affected.
Several cheese products have instead been placed on a list facing a 50% tariff, alongside some paper, aluminium, wood, furniture and lighting products.
The latest measures follow 50% US tariffs imposed last month on certain Canadian goods after several rounds of negotiations between the two countries broke down. The tariffs cover sectors including wine, furniture, dairy, cement, clothing, fishing rods and hockey equipment.
Canadian Prime Minister Mark Carney said the country would have to reduce its reliance on the US, despite the economic cost.
“We have everything we need to pivot and prosper,” Carney said in a video posted on YouTube after Canada’s retaliatory tariffs took effect.
“That pivot will come at a cost. There’s always a cost to action. But it doesn’t come close to the cost of standing still,” he said.
Canada sends almost 68% of its exports to the US this year, with around 80% of those shipments moving duty-free under the US-Mexico-Canada Agreement (USMCA).
The widening dispute has raised concerns over the future of the USMCA, which has supported trade across North America for decades.
Canadian and US officials have continued discussions, although formal trade negotiations are not currently taking place, according to Gabriel Brunet, spokesperson for Canadian Minister responsible for bilateral US trade Dominic LeBlanc.
A US official meanwhile said President Donald Trump’s threat to increase tariffs on Canadian automobiles from 25% to 50% from Jan 1 remained in place.
US Trade Representative Jamieson Greer has also spoken with LeBlanc in recent days, with further discussions expected as both sides consider whether there is a way to ease the standoff.
The escalation comes as Trump continues to target Canada publicly, including a recent threat against Canadian aircraft maker Bombardier and repeated calls for Canada to become the 51st US state.
Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance, said the main concern was that the dispute could continue to escalate.
“What we are worried about is an escalatory spiral,” he said.
“But at the same time, we totally understand that the prime minister needs to find areas of leverage.”
Reuters
