Canadian retaliatory tariffs of up to 50% on some 700 US goods took effect on Tuesday and led to a quick response from the White House who unveiled plans hours later that included a plan to ban Canadian dairy products, most alcoholic beverages and motorcycles as relations between the US and Canada took yet another turn for the worse.
The move by Canadian Prime Minister Mark Carney solidified Canada as one of the few nations to choose confrontation in President Trump’s trade wars. Canadians say they are willing to endure economic pain to make a point.
And neither side appeared interested in stepping back Tuesday with Carney striking a defiant tone and Trump’s team quickly rolling out a series of actions in response, including the plans for a full ban on dairy products and a partial ban on alchohol products which currently have tariffs but will now be “excluded from importation into the United States” on September 29 if the stalemate between the two nations continues.
These bans will be carried out, the White House says, under Presidential Authority derived from Section 338 of the Tariff Act of 1930.
The new Canadian tariffs that went into effect on Tuesday were first announced in August to match an array of 50% tariffs that Trump imposed after trade talks broke down. The White House response to that response on Tuesday evening also included plans to adjust tariffs on other goods and a ban on Canadian goods in government contracts.
The Senior Trump administration official described Tuesday night’s action as a response to Canadian actions but also said that US and Canadians officials had been in touch in recent days in what were described as constructive talks even as they remain far apart.
Meanwhile, the public position from the leaders of both sides has hardened in recent days.
Carney, in a web video released on Tuesday, struck a defiant tone acknowledging that a trade war would cause economic pain in his country but promising “we will do whatever it takes for as long as it takes” to avoid what he called a bad deal with the US.
Trump for his part has mostly been lobbing insults and recently posted a map that showed Canada and Mexico as part of the United States and leveled a threat to ban sales of Canadian aircraft manufacturer Bombardier in the United States.
Canada’s new tariffs from 15 to 50%
The new measures from Canada went into effect at 12:01 a.m. ET, doubling the tariffs on American steel and aluminum products to 50%. Other tariffs range from 15% to 50% on clothing, wood products, appliances, cosmetics, farm equipment, and more.
In total, the new tariffs affect about $20 billion in US goods, or roughly 6% of what the United States sent to Canada last year.
Canada announced the plan as a “dollar-for-dollar” response to Trump, but the duties are more limited than the US tariffs, which hit about $28 billion in Canadian imports, reflecting Canada’s smaller economy.
Canada had also planned additional tariffs on maritime products like lobster and fish, but those were rolled back after an outcry on both sides of the border.
Carney told reporters recently that he is in no hurry to restart talks with the US and is focused on increasing trade with other countries instead of “waiting for a call, refreshing on social media to see what’s coming across.”
Further escalation
Trump on Monday this week targeted Canada’s aerospace industry and posted “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”
Bombardier quickly responded in a statement that the company employs thousands of Americans whose jobs could be put at risk if the president follows through on the threat. Republican Sen. Jerry Moran, a Trump ally, echoed that concern, noting that Bombardier employs more than 1,000 workers in Wichita, Kan.
Tuesday night’s action from the White House also included a move to shut Canadian products out of US government contracts until Canada allows what the White House describes as “full and fair reciprocity″ for American products.
Trump is also pledging further escalation that could have deeper economic ripples, most notably a threat of 50% tariffs on autos and auto parts at the end of the year. Last Friday, he went so far as to muse about ending “all trade with Canada” as he threatened embargoes on the world.
Yet the tit-for-tat actions so far have not touched some of the most sensitive areas of US/Canadian trade — most notably oil and gas, as well as Canadian potash fertilizer that US farmers rely on.
US goods exports to Canada in 2025 totaled $333.6 billion, while US imports from Canada totaled $381.9 billion, according to Trump’s trade representative.
This story has been updated with additional developments.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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