Trump bans some Canada goods, puts 50% tariffs on others

Banned products include dairy goods, most alcoholic drinks and motorcycles

The US is banning dairy products, most alcoholic drinks and motorcycles from Canada, the White House said on Tuesday, as the trade war between the two neighbours and long-time allies escalates.

The ban will take effect in three weeks and comes after Canada imposed retaliatory tariffs on US$20 billion in US imports earlier on Tuesday.

A range of Canadian products from mattresses to motorboats and golf carts will be subject to a 50 per cent surcharge beginning September 15, a presidential executive order stated.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

US President Donald Trump also moved Tuesday to shut Canadian products out of large, long-term US government contracts as Canada’s retaliatory tariffs took effect and Prime Minister Mark Carney vowed to speed efforts to reduce the country’s dependence on the US.

Trump directed the US General Services Administration to declare Canadian products ineligible for those contracts until Canada allows “full and fair reciprocity” for American products.

Carney said on Tuesday that Canada’s strategy was about becoming more independent. “It’s about ensuring that no country can hold us hostage. And that we can live how we want to live.”

The rupture has upended one of the world’s closest relationships. On August 22, the US imposed 50 per cent tariffs on about 5 per cent of Canadian imports, charging that Canada had unfairly treated the American dairy, alcoholic beverage and auto industries.

The US and Canada have long sparred over trade, particularly Canada’s protected dairy market and its subsidies for producers of softwood timber. But they remained friends and staunch allies.

Under Trump, US-Canada relations have deteriorated rapidly. In addition to imposing tariffs on Canadian products, Trump has repeatedly made inflammatory comments about making Canada the 51st US state. Carney came to power in a come-from-behind political victory last year by promising to stand up to him.

Some Canadian provinces have banned the sale of US alcoholic products – a move that prompted the retaliatory US ban on Tuesday.

Canada is exploring ties with the European Union that could stop just short of membership, a Canadian official familiar with the discussions said.

Options could include expanding existing agreements, negotiating a new treaty or creating other forms of cooperation. The official said Canada is already consulting provinces, territories and labour groups about what a deeper relationship with the EU could look like, but no model has been chosen.

The official spoke on condition of anonymity because they were not authorised to discuss the talks publicly.

Carney is due in Strasbourg, France, next week, where he will attend European Commission President Ursula von der Leyen’s State of the European Union address on September 16 and address the European Parliament the following day.

Carney acknowledged the trade actions would cause short-term pain but said they would push Canada to move faster on investment, infrastructure and trade diversification.

“It was easy business, but it meant we relied too much on one economic partner,” he said. “That time is over.”

More than 70 per cent of Canadian exports still go to the United States, underscoring the scale of Carney’s push to diversify trade. He said Canada’s exports to other countries are rising sharply and are on track to double over the next decade.

Carney defended the retaliation, saying Canada could not let American goods enter tariff-free while Canadian companies face US tariffs.

Canada was not seeking to escalate the confrontation, he said, but the tariffs were necessary to protect Canadian workers.

Carney said the larger problem was what Washington had sought in the failed negotiations.

“The most fundamental issue is that the cumulative US demands revealed that they wanted us to become even more reliant on them, not less,” he said. “In too many areas, they wanted dependency, not a true economic partnership.”

The prime minister said Washington sought limits on French-language and cultural protections, influence over future trade deals and terms that would weaken the auto, steel and forestry sectors.

How the trade war ends could carry consequences far beyond Canada, testing whether a smaller US ally can resist Trump’s economic pressure without being forced to yield.

Earlier on Tuesday, a Canadian official said Ottawa did not intend to change course regardless of whether Trump responded with nothing or what the official called a “nuclear response”. The government’s strategy will remain focused on building more at home and diversifying trade abroad, the official said.

The tariffs hit hundreds of American products, including steel, aluminium, cheese, appliances, clothing, cosmetics and farm equipment, at rates of 15 per cent, 25 per cent or 50 per cent. They cover about US$20 billion in American goods, roughly 6 per cent of the US$333.6 billion the US exported to Canada last year.

Since Canada-US trade talks collapsed on August 21, Trump and his administration have imposed additional tariffs and issued a series of threats and attacks portraying Canada as weak and dependent.

Trump’s trade war and repeated talk of making Canada the 51st state have fuelled anger across the country. Canadians have sharply cut travel to the United States and boycotted US goods, moves Carney praised as signs of national resolve.

British Columbia Premier David Eby said the province would install new signs at US border crossings reading: “Welcome to British Columbia, Canada. Strong, proud and will NEVER be the 51st state. Sorry!”

“While our kindness is one of our greatest strengths, you should never, ever mistake that kindness for weakness,” Eby said.

Gabriel Brunet, a spokesman for Canada-US Trade Minister Dominic LeBlanc, said officials from both countries remain in contact even though formal talks have not resumed.

Former US trade official Wendy Cutler said Carney’s public approval rating, now topping 70 per cent, gives him little reason to restart talks.

“Clearly, at this point each side does not want to look too anxious to re-engage in fear of looking weak,” she said.

Additional reporting by Agence France-Presse