US ban on Canadian alcohol and dairy comes into effect as trade war drags on
It is the latest escalation in the Canada-US trade war after negotiations collapsed in late August, with no word on when talks may resume.
US ban on Canadian alcohol and dairy takes effect as trade war continues
About 90% of all Canadian alcohol exports were bound for the US in 2025, with most coming from Ontario
A US ban on a number of Canadian imports, including alcohol, dairy and motorcycles, has now taken effect as the trade war between the two neighbours continues.
The Trump administration’s latest move comes in response to Canada’s introduction of tariffs on a range of US goods earlier this month after trade talks broke down.
Canada is not expected to respond with further retaliation, with Prime Minister Mark Carney saying earlier this month that the effect of the import bans on Canada’s economy is "modest".
Trade negotiations remain stalled, with US trade representative Jamieson Greer telling CNBC recently that President Donald Trump is "comfortable" with his current relationship with Canada.
"They call us now and then and we have good conversations about potential deals. But there's no urgency on our side," Greer said of relations with Canada in an interview with the US network last week.
Tuesday’s trade ban covers nearly C$1bn ($710m; £530m) worth of Canadian liquor exported to the US, along with whey products used in protein powder.
Motorcycle exports to the US will also be affected, although Canada shipped only about 5,000 motorcycles south of the border in 2025, worth roughly C$120m, according to national data from Statistics Canada, so the impact is expected to be limited.
Trump first announced the import bans in a series of executive orders signed on 8 September. In those orders, he said the measures were a response to "continued discrimination" by Canada against US dairy, automotives and alcohol.
Speaking to reports on Monday, he accused Canada of "treating the United States very unfairly".
"They have been one of the worst countries in the entire world," Trump said.
Carney said earlier this month that the bans "are relatively modest measures" compared with other trade actions the US has taken against Canada.
He added, however, that the bans will damage certain businesses and sectors that are directly targeted.
Derek Holt, an economist at Canadian bank Scotiabank, wrote in an analysis that "these actions are face-saving by the US administration, not substantive in nature and that's a positive".
About 93% of all Canadian liquor exports in 2025 were sold to the US. Spirits Canada, a group representing Canadian liquor producers, has said the impact on the industry "could be significant".
Economists and businesses have also warned that the bans will increase uncertainty about the future of Canada’s trade relationship with the US, its largest trading partner.
Alongside these latest import bans, the US has imposed 50% tariffs on a range of Canadian goods, including dairy, alcohol, steel and aluminium products, as well as 25% tariffs on Canadian-built cars.
In response, Canada has imposed retaliatory tariffs of 15% to 50% on more than 700 US products, along with a 25% levy on certain steel and aluminium products. Most Canadian provinces have also stopped selling US liquor.
Tariffs - taxes paid on imported goods - are central to Trump's economic agenda, which he says raise government revenue and encourage consumers to buy American-made goods.
Economists, however, say they have pushed up prices of everyday goods for consumers and disrupted the global economy.