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US-Canada Trade War Escalates From Tariffs Toward Import Bans
Starting September 29, the United States will ban imports of Canadian dairy, alcohol, and motor vehicles under Section 338 of the Tariff Act of 1930, escalating the monthslong trade dispute between the two allies.
President Donald Trump imposed 50% tariffs on Canadian goods in July, citing unfair trade practices; Canada responded with retaliatory duties on $20 billion in American products on September 8.
Annual Canadian export exposure to the new U.S. ban is estimated between $2.3 billion and $2.8 billion, with alcohol and dairy sectors hit hardest; industry associations warn the barriers force companies to reorganize production.
Seeking to maintain market access, beverage producer Sapporo is moving production of non-alcoholic beer destined for the U.S. market from Canada to the United States, illustrating how trade barriers disrupt supply chains.
Prime Minister Mark Carney travels to France this week to deepen Canada's trade ties beyond North America, though analysts question whether this diversification strategy can offset the loss of tariff-free access to the U.S. market.