Cans of Canadian-made Molson beer on a shelf at the Liquor Control Board of Ontario (LCBO) Queen’s Quay store in Toronto, Ontario, Canada, on Tuesday, March 4, 2025.
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The White House said it would ban imports of Canadian motorbikes and a slew of other products starting later this month as diplomatic and trade relations with Ottawa continue to fray.
U.S. President Donald Trump used a string of executive orders late Monday to announce bans on Canadian whey products and molasses, non-alcoholic beer, and a slew of alcoholic drinks including malt beer, wines, cider, whiskies, vodka and other spirits. Larger-capacity motorcycles and mopeds will also be banned.
The import restrictions, which largely replace tariffs of 50%, are due to take effect on Sept. 29, 2026.
The U.S. also announced that tariffs on other Canadian products would be modified and extended from Sept. 15, including the addition of all-terrain vehicles and animal hides, and the removal of rock salt and cement.
U.S. Trade Representative Jamieson Greer said the moves were a “natural consequence of Canada’s continued discriminatory treatment of crucial American exports.”
It was announced on the same day that Canadian tariffs on CA$27.6 billion of U.S. imports came into effect, targeting more than 700 goods across steel, dairy, farm equipment, pulp and paper, electronics and more.
Ottawa previously said those tariffs were a “dollar for dollar” response to the 50% tariffs imposed by the U.S. on its own goods in August, after trade talks collapsed spectacularly just before the Aug. 21 deadline.
The two sides have continued to blame one another for the failure to reach a deal, and accused the other of unfair practices that harm their domestic workers.
Trump has accused Canada of disadvantaging U.S. exports through its policies in the auto, alcohol and dairy sectors, highlighting the U.S.’ trade deficit in goods, and threatening to hit cars, trucks and auto parts with a 50% tariff from Jan. 1, 2027.
Canadian Prime Minister Mark Carney said in an August address that the “narrow merchandise trade deficit only exists because the U.S. buys so much of its energy from us,” and flagged that Canada is the biggest consumer for U.S. cars and steel.
He also said that the U.S. “asked too much” in its trade negotiations and that retaliation was needed to protect Canadian workers and companies, even if there is an economic hit and reduced choice for consumers.
The existing tariffs apply to a relatively small portion of the $715.5 billion trade in goods between the countries, but economists have warned of an immediate blow to small- and medium-sized businesses and of the risks to growth from further escalation.
“Companies on both sides of the border will need to wait to see if these tariffs hold, more measures are enacted, or each country decides to de-escalate. In the meantime, those businesses will realize both tariff-, compliance-, and uncertainty-related costs,” said Justin Angotti, associate in the International Trade and National Security Group at law firm Reed Smith.
Ottawa is meanwhile eyeing closer trade and security ties with the European Union as its relationship with Washington deteriorates, Bloomberg reported Tuesday.
Alcohol wars
Beer and spirits sales have emerged as a political flashpoint as relations between the U.S. and Canada have deteriorated.
Stores in several Canadian provinces have removed U.S. alcohol from their shelves, public campaigns have called for boycotts, and Saskatchewan Premier Scott Moe in August announced a 50% tariff on American imports.
Moe’s team told CNBC this week that the alcohol levy was a “reciprocal measure” intended to support local businesses and encourage progress toward a fair and balanced trade resolution.
U.S. spirits exports to Canada fell more than 70% year-on-year from the start of the retaliatory ban in March 2025 through December 2025, according to the Distilled Spirits Council of the United States.
Chris Swonger, president and CEO of the trade association, said American distillers had “shouldered the brunt of this trade dispute.”
“We appreciate President Trump’s recognition of the significant harm these sales bans have caused U.S. distillers and urge leaders on both sides of the border to reach a negotiated solution that restores U.S. spirits to retail shelves throughout Canada and returns the spirits sector to a permanent zero-for-zero tariff framework,” Swonger said.
— CNBC’s Brandon Gomez contributed to this story.
