US-Canada trade war moves into dangerous new territory

From booze and dairy to motorcycles, Trump’s latest move shuts Canadian goods out of the US market

The latest escalation in Donald Trump’s trade fight with Canada came into force Tuesday, with the United States banning almost $1 billion worth of Canadian imports, including alcoholic drinks, dairy products and motorcycles.

On the face of it, the figure is tiny compared with the roughly $880 billion in annual two-way trade between the two countries. But the significance of the move is less about the money involved and more about what it says about where the relationship is heading.

From tariffs to outright bans

The banned products were already facing heavy US tariffs, meaning some were becoming commercially difficult to sell in America anyway.

Trade-policy analyst Jacob Jensen estimates that the latest restrictions cover about $967 million of Canadian imports, with alcoholic beverages accounting for around 87 per cent of the total.

The list includes Canadian whisky, beer and wine, as well as dairy products including whey. Certain motorcycles are also affected, including Quebec-based BRP’s Can-Am models.

For some Canadian businesses, however, the difference between a 50 per cent tariff and a closed American market is enormous. Industry representatives say companies that spent years building US customers now face losing that market virtually overnight.

Why Trump is doing it

The latest action follows Canada's decision to retaliate against earlier US tariffs with duties of its own.

Trump has argued that Canada has treated American businesses unfairly, particularly in areas including dairy and alcoholic beverages. Several Canadian provinces had also restricted sales of US alcohol, providing another target for Washington's retaliation.

Trump said Monday that he still expected Canada eventually to return to negotiations and agree to what he considers a fair deal.

But Washington's trade representative has indicated there is no urgency to reach an agreement, suggesting the confrontation could continue rather than being settled quickly.

Carney looks beyond America

Canadian Prime Minister Mark Carney is responding by trying to reduce Canada's dependence on its southern neighbour.

More than 70 per cent of Canadian exports went to the United States last year, making that a difficult shift. But Ottawa is pursuing expanded trade with Europe and India while also developing closer economic links with other countries.

Carney has said Canada wants to double its non-US trade over the next decade.

That could prove to be one of the most important consequences of the dispute: the longer the confrontation lasts, the greater the incentive for Canada to build alternative markets rather than rely so heavily on the United States.

The bigger prize: North American trade

The latest bans also come as the future of the US-Mexico-Canada Agreement (USMCA) becomes increasingly uncertain.

The agreement was designed to make North American trade easier and more predictable. Instead, tariffs, counter-tariffs and now outright import bans are creating a much more complicated trading environment.

So while $1 billion sounds dramatic, the real issue is considerably larger.

America and Canada are no longer simply arguing over individual products. They are fighting over the future rules of one of the world's biggest trading relationships.

And neither side currently appears ready to blink.

SOURCE

We ain't apologizing for anything. 🇨🇦

And yet the US is still importing Aluminum (without the "i") and the American consumer will end up paying the tariffs.

Quebec smelters and processers are still running at about 95+%. Exports to Europe have risen to about 18% of output.

Aluminium production is about hydro power ie. rivers; not about the bauxite raw material supply. Canada has rivers.

I love Carney, he's taking it to the goon, and outsmarting him at every turn. I guess it helps to outclass the numskull by 60 IQ points.

It feels like the resistance is starting to accelerate. Mark Carney made a heroic effort at resistance, and perhaps he is setting a positive trend.

Sweet resistance. Just say no to the insatiable pig.

President Trump makes demands. When the other side does not give him what he wants, he escalates with bombastic threats of crippling punishment. The other side surrenders.

Except that Mark Carney, the prime minister of Canada, evidently has not read the script. His refusal to buckle in the face of Mr. Trump’s trade ultimatum even at the cost of retaliatory tariffs has flipped the narrative of the president’s second term. Instead of giving in, Mr. Carney is testing whether defiance is a viable strategy against Mr. Trump.

The age of capitulation that defined Mr. Trump’s return to office may be starting to fade. World leaders and domestic institutions are, in some cases at least, showing less willingness to submit to Mr. Trump’s will. European leaders have refused to join his war with Iran. Prime Minister Benjamin Netanyahu of Israel flatly rejected his Gaza plan. Gulf Arab states forced him to abandon plans to charge a shipping toll in the Strait of Hormuz.

Universities and law firms are rebuffing his directives rather than signing on the bottom line. Bond markets are rebelling against his fiscal policies. Even the ABC network, whose $16 million payment to settle a Trump lawsuit was seen as an early example of yielding to the president, has discovered that it did not buy peace and is now suing his administration for threatening its broadcast licenses.

But even among Republicans, there are some worrisome signs for the president. Although he has successfully punished several prominent Republican lawmakers he deemed disloyal by rallying his MAGA base to defeat them in party primaries this year, G.O.P. voters have rejected Mr. Trump’s endorsed candidates in 10 nominating contests, including six in August alone. Polls show his support among Republicans slipping.

“I think that recent weeks have been somewhat of an inflection point,” said Norm Eisen, a former Obama White House lawyer and founder of a group called the Democracy Defenders Fund, who has been waging multiple court fights against Mr. Trump. “At home and abroad, pro-democracy forces and everybody else are standing up to him with much more widespread vigor.”

To the extent that there has been a shift, Mr. Eisen said, it owes in part to overreaching by Mr. Trump. “Trump has been his own worst enemy,” he said.

“Greenland was a turning point, in part because it was an attack on the sovereignty of Europe itself and Europeans began to understand at that point there was simply no end to Trump’s rapaciousness and to his demands,” said Jeremy Shapiro, a former State Department official now at the European Council on Foreign Relations.

Leaders across the world are watching. Mr. Shapiro said they “mostly now believe that backing down in the face of Trumpian aggression or insults only encourages more demands.” He added: “I think Carney is setting the template for how they will respond to future Trumpian tariff threats.

https://www.nytimes.com/2026/08/25/us/politics/trump-polls-tariffs-carney.html?smid=nytcore-android-share

1 hour ago, VocalNeal said:

And yet the US is still importing Aluminum (without the "i") and the American consumer will end up paying the tariffs.

Quebec smelters and processers are still running at about 95+%. Exports to Europe have risen to about 18% of output.

Aluminium production is about hydro power ie. rivers; not about the bauxite raw material supply. Canada has rivers.

That's where the Chinese are killing it.......smelting bauxite using 'cheap' electricity yields rare earth minerals that the US is or will be desperate for now or in the future.

4 minutes ago, spidermike007 said:

I guess it helps to outclass the numskull by 60 IQ points.

Gets Carney to 133.....which is not bad.