A truck crosses into the United States from Canada on the Gordie Howe International Bridge, connecting Windsor, Ontario, and Detroit, Michigan, on September 6, 2026. (AFP Photo)
The United States has sharply escalated its trade war with Canada, banning some Canadian dairy products and motorcycles as well as most alcoholic beverages after retaliatory Canadian tariffs took effect on about $20 billion in U.S. goods.
U.S. President Donald Trump also moved to shut Canadian products out of large, long-term U.S. government contracts, broadening the confrontation beyond tariffs as relations between the longtime allies deteriorate further.
The outcome could resonate far beyond Canada, showing other governments whether a smaller U.S. ally can withstand Trump’s economic pressure.
Canadian Prime Minister Mark Carney says U.S. demands could hollow out key Canadian industries and limit the country’s independence, while Trump’s threats to Canadian sovereignty have rallied the public behind him.
“Carney and Canada have become symbolic of resistance to him,” Canadian historian Robert Bothwell said. “And what he’ll want to do is make an example of Carney and Canada and theoretically terrify everybody else while in fact showing them that they need to remove themselves even further from the United States.”
The latest U.S. bans take effect on Sept. 29 and cover various Canadian wines and spirits, some motorcycles and mopeds, dairy products including whey, and some types of molasses.
Canada says its tariffs match Washington’s dollar for dollar and rate for rate. They took effect on Sept. 8 and cover about $20 billion in American goods, roughly 6 percent of the $333.6 billion the United States exported to Canada last year.
The tariffs hit hundreds of American products, including steel, aluminum, cheese, appliances, clothing, cosmetics and farm equipment, at rates of 15 percent, 25 percent or 50 percent.
Canada has already gone beyond tariffs in other ways. Eight of its 10 provinces continue to restrict or ban sales of U.S. alcohol. The Distilled Spirits Council says U.S. spirits exports to Canada fell more than 70 percent year over year after those restrictions took effect.
Trump’s trade war and repeated talk of making Canada the 51st state have fueled anger and rallied support for Carney. Canadians have sharply cut travel to the United States and boycotted U.S. goods.
The current trade war began after Trump returned to office and imposed a series of tariffs on Canadian goods despite having negotiated and repeatedly praised the North American trade agreement during his first term. Many of those tariffs violate the pact.
At the World Economic Forum in Davos in January, Carney warned that great powers are using economic integration to coerce smaller countries. The speech helped establish him as the leading voice among countries looking for ways to resist Trump.
Trump responded a day later by saying Canada “lives because of the United States” and warning: “Mark, remember that next time you make your statements.”
Carney will address the European Parliament next week as Canada explores deeper ties with the European Union that could stop just short of membership.
“The Canadian public is behind the Carney government and the world is watching what will happen next,” said Béland, the McGill political scientist. If Canada’s defiant approach succeeds, he said, it “could be used as a template” for resisting the Trump administration’s trade policies.
