US banning dairy products, most alcohol and motorcycles in trade war

TORONTO (AP):

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

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

Trump also moved to shut Canadian products out of large, long-term US government contracts and directed the US General Services Administration to declare Canadian products ineligible for those contracts until Canada allows “full and fair reciprocity” for American products.

Canadian Prime Minister Mark Carney said Canada’s strategy was about becoming more independent and vowed to speed those efforts. “It’s about ensuring that no country can hold us hostage and that we can live how we want to live,” he said.

The rupture has upended one of the world’s closest relationships. On August 22, the US imposed 50 per cent tariffs on about five per cent of Canadian imports, charging that Canada had unfairly treated the American dairy, alcoholic beverage, and auto industries.

The US and Canada have long sparred over trade, particularly Canada’s protected dairy market and the US government’s allegations that it subsidises producers of softwood lumber. But they remained friends and staunch allies.

Under Trump, US-Canada relations have deteriorated rapidly. In addition to imposing tariffs on Canadian products, Trump has repeatedly made inflammatory comments about making Canada the 51st US 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 US alcoholic products – a move that prompted the retaliatory US 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.

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 labour 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 authorised 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 on September 16 and address the European Parliament the following day.

BEYOND THE US

Carney acknowledged that the trade actions would cause short-term pain but said that 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 per cent 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.

Carney defended the retaliation, saying Canada could not let American goods enter tariff-free while Canadian companies face US 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 US 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 US ally can resist Trump’s economic pressure without being forced to yield.

Canada-US Trade Minister Dominic LeBlanc said the government was assessing the latest US tariff measures and that he remained in contact with US Trade Representative Jamieson Greer, adding that Canada was ready to engage when Washington was.