US Escalates Canada Trade War with Bans, New Tariffs
The White House has banned imports of certain Canadian alcoholic beverages, dairy products, and motor vehicles and expanded 50% tariffs to other goods in a significant escalation of the ongoing trade dispute.
On September 8, the U.S. president issued proclamations banning certain imports from Canada, including select alcohol, dairy, and motorcycles, effective September 29. The administration also modified the list of Canadian goods subject to 50% tariffs under Section 338 of the Tariff Act of 1930, adding some products and removing others, effective September 15.
This action marks a major escalation in the U.S.-Canada trade war, which began with U.S. tariffs in August and prompted immediate Canadian retaliation; the new U.S. measures are a direct response to those Canadian tariffs. These Section 338 duties stack on top of existing tariffs, such as those under Section 232, and do not exempt goods otherwise qualifying for USMCA preference, creating significant cost uncertainty for businesses with cross-border supply chains.
Companies importing from Canada must immediately review the new product lists to determine if their goods are subject to the bans or tariffs. Additionally, federal contractors should monitor for an expected announcement removing Canadian-origin products from the GSA's Multiple Award Schedules, which would impact government procurement eligibility.