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Business News›News›International›World News›US bans Canadian dairy, motorcycles and alcohol imports as trade war deepens

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US bans Canadian dairy, motorcycles and alcohol imports as trade war deepens
Synopsis

The United States is banning Canadian dairy products and motorcycles. This action escalates the ongoing trade war between the two nations. Canada previously imposed retaliatory tariffs on American imports earlier today. Prime Minister Mark Carney vowed to reduce dependence on the United States. Both countries remain in contact, exploring potential paths forward.

AP

Toronto: The United States is banning the import of some dairy products and motorcycles from Canada along with most alcoholic beverages, the White House said Tuesday, as part of a trade war between the two neighbors and longtime allies that shows little sign of cooling off.



The ban will take effect in three weeks, on Sept. 29, and comes after retaliatory tariffs promised by Canada kicked in earlier Tuesday on $20 billion in U.S. imports. Canada had responded to tariff moves by U.S. President Donald Trump after trade talks between the countries broke down last month.



Also Read: Canada’s tariff counterpunch: Where Ottawa is hitting Donald Trump’s America

Trump also moved earlier Tuesday to shut Canadian products out of large, long-term U.S. government contracts as Canada's retaliatory tariffs took effect. Prime Minister Mark Carney vowed to speed efforts to reduce the country's dependence on the United States.



Trump directed the U.S. General Services Administration to declare Canadian products ineligible for those contracts until Canada allows "full and fair reciprocity″ for American products.




Carney said 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 Aug. 22, the U.S. imposed 50% tariffs on about 5% of Canadian imports, charging that Canada had unfairly treated the American dairy, alcoholic beverage and auto industries.

The U.S. and Canada have long sparred over trade, particularly Canada's protected dairy market and its subsidies for producers of softwood lumber. But they remained friends and staunch allies.



Under Trump, U.S.-Canada relations have deteriorated rapidly. In addition to imposing tariffs on Canadian products, Trump has repeatedly made inflammatory comments about making Canada the 51st U.S. 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 U.S. alcoholic products – a move that prompted the retaliatory U.S. ban on Tuesday on various Canadian wines and spirits. Also subject to the ban are some motorcycles and mopeds, dairy products, including whey, and various types of molasses.



Also Read: Canada's retaliatory tariffs take effect as US trade talks stall



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 labor 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 authorized 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 Sept. 16 and address the European Parliament the following day.

Canada looks beyond the US

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% 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.

Canada retaliates as Trump responds

Carney defended the retaliation, saying Canada could not let American goods enter tariff-free while Canadian companies face U.S. 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 U.S. 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 U.S. 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, aluminum, cheese, appliances, clothing, cosmetics and farm equipment, at rates of 15%, 25% or 50%. They cover about $20 billion in American goods, roughly 6% of the $333.6 billion the United States exported to Canada last year.



Since Canada-U.S. trade talks collapsed Aug. 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 fueled anger across the country. Canadians have sharply cut travel to the United States and boycotted U.S. goods, moves Carney praised as signs of national resolve.



British Columbia Premier David Eby said the province will install new signs at U.S. 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.

Neither side is rushing back to the table

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



The senior Trump administration official who briefed reporters during a conference call late Tuesday that was arranged by the White House said U.S. and Canadian trade representatives have had "constructive conversations" and would speak again in coming days to see if there's a "path forward."



Former U.S. trade official Wendy Cutler said Carney's public approval rating, now topping 70%, gives him little reason to restart talks.



"Clearly, at this point each side does not want to look too anxious to reengage in fear of looking weak," she said.

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