U.S. to ban imports of some Canadian products as trade war escalates

U.S. President Donald Trump plans to ban a range of Canadian exports and shuffle tariffs on others as Ottawa and Washington trade accusations over which side is responsible for the escalating trade war.

Most imports of Canadian-made liquor and a handful of dairy products will be banned from the United States at the end of September, but dozens of other products are getting a tariff reprieve.

Trump on Tuesday signed new executive orders ramping up retaliation after Canada imposed its latest set of counter tariffs on the United States.

The five new orders, which take effect later this month, will completely bar imports of certain Canadian goods, including motorcycles, some dairy products like whey and cheese, and molasses.

Alcoholic products from Canada, including beer, wine, rye and vodka, are also facing a ban.

But the orders also exempt from tariffs some Canadian products, including toilet paper, road salt, cement and fishing rods. Canadian whiskey and liqueur in bottles larger than four litres will also be exempt.

Canada and U.S. trade officials in contact, Champagne says

With these exports set for exemptions, new products with a similar dollar value have been substituted on the U.S. tariff list.

The product bans will go into place Sept. 29, while the additions and removals of other tariffs take effect Sept. 15.

Much like Canada was pressured by domestic companies and provincial leaders to back off of seafood tariffs, there has been pressure on the White House from state representatives and American companies about the economic impacts of certain tariffs.

In a statement posted on X Tuesday, Maine Sen. Susan Collins said she appreciated the Trump administration’s flexibility as she continued to press for a trade resolution with Canada.

“I mentioned in a letter to the Administration that Frenchville, a small Maine town on the Canadian border, would incur $10,000 in extra costs for road salt, threatening the town’s ability to provide municipal services,” wrote Collins, a Republican.

“These additional exemptions follow Canada’s announcement that it will carve out American seafood and fish products from its retaliatory tariff list, which would have caused significant harm to Maine’s lobstermen.”

Collins said tariffs on forest products were still in place and would lead to higher costs in Maine.

“I urge the Administration to continue to work to de-escalate this conflict,” she said.

U.S. Republican Senator Jerry Moran said on social media that the Trump administration’s decision to exempt salt from tariffs on Canadian imports is “welcome news” for Kansas businesses and taxpayers.

He said salt is a critical commodity in his state, with local governments utilizing it to remove ice and keep Kansans “safe on the roads.”

“When these tariffs were proposed, I urged the U.S. Trade Representative to consider the impact on Kansas taxpayers and local businesses, including Morton Salt and Compass Minerals, both headquartered in Overland Park, which own and operate Canadian mines and bring salt into the United States for distribution,” he said.

BMO chief economist Doug Porter said the “reshuffling” of U.S. tariffs will have no new net effect on Canada’s economy. New import bans, while potentially consequential to the industries themselves, are also expected to have a marginal impact on the wider economy.

Porter said by swapping out tariffs on key inputs such as cement, the Trump administration could be trying to avoid further inflaming the inflationary pressures dogging the U.S. economy.

In a statement issued Tuesday, U.S. Trade Representative Jamieson Greer blamed Canada for Washington’s decision to escalate the trade war.

Greer said the escalation was a “natural consequence” of Canada discriminating against American exports and choosing “senseless retaliation” over an almost final trade deal.

“President Trump will continue to leverage the tools at his disposal to defend the interests of American workers and exporters, and restore reciprocity in our bilateral trade relationships,” Greer said in a statement.

Finance Minister François-Philippe Champagne said Ottawa is not ramping up the trade war when he spoke to reporters in Edmonton on Wednesday.

“This is not a trade conflict that we chose. We certainly did not escalate,” Champagne said. “The counter-measures that we have announced were proportionate, were strategic and were targeted.”

Canada’s retaliatory tariffs targeted the same value of goods hit by the U.S. on Aug. 22, and the products affected were drawn from those the U.S. targeted as well.

Speaking at an event hosted by the Edmonton Chamber of Commerce earlier in the day, Champagne recounted his conversation with U.S. Treasury Secretary Scott Bessent on the sidelines of the G20 finance ministers meetings in North Carolina last week.

Champagne said he was “serious” and “firm” in the discussion. He said Canada’s counter-tariffs were about giving Canadian firms a “level playing field.”

“If you’re going to put tariffs on Canadian companies who want to sell in the United States, if I don’t react, then I give an unfair advantage to U.S. companies wanting to come into Canada,” he told the crowd.

Trump’s Section 338 tariffs, imposed on a range of Canadian goods starting Aug. 22, hit some five per cent of Canada’s exports to the United States with a dollar value of around $28-billion.

Canada’s tariffs target a similar dollar value of U.S. exports but at duty rates of 15 to 50 per cent.

Prime Minister Mark Carney has said that Canada’s pivot away from the United States will come at a cost, but the alternative would be far worse.

Stephen Brown, chief North America economist at Capital Economics, said in a note to clients Wednesday that the items removed from the U.S. tariff list are valued at roughly US$1.7 billion, and the new targets are worth about the same amount.

He estimated that Trump’s new import bans will apply to 0.25 per cent of Canada’s exports to the United States, or 0.03 per cent of total U.S. imports.

Brown said the U.S. import bans will have “little effect on either economy.”

“Nonetheless, the escalation raises the risk that the 50 per cent tariffs will remain in place for longer than the month or so that we assumed for our forecasts, therefore dealing the Canadian economy a larger blow,” he said.