Trump escalating trade war with Canada: vetoes its motorcycles, dairy products and liquor
The President of the United States is using a 1930 regulation to prohibit the import of Canadian products in response to the counter-tariffs with which Ottawa responded to Washington.
The United States President Donald Trump has escalated the trade war with Canada by banning the importations of dairy products, alcoholic beverages, and motorcycles from the Northern neighbor. This move comes in response to Canada's retaliatory tariffs in retaliation for the US tariffs on Canadian goods. Trump has issued five proclamations, under Section 338 of the 1930 Tariff Act, to ban certain Canadian products.
The trade bans are set to take effect on September 29th, with additional tariffs on 50% of products, including SUVs and certain dairy products, starting September 15th. The administration is also restricting government purchases, pulling $5 billion from a $500 billion spending spree. This move comes after the trade conflict between the two countries began in July when Washington accused Canada of mistreating American products by imposing tariffs of up to 50% on 20 billion dollars worth of Canadian exports.
After months of fruitless negotiations, the US tariffs took effect on August 22nd, and the Canadian government announced it would retaliate with its own 15% to 50% tariffs on US products crossing the border. Trump initially countered by renaming Lake Ontario to America Lake, but after Canadian tariffs took effect on Tuesday, September 8th, the US president took a further step.
The use of total trade veto on third-party products is a new addition to the trade arsenal deployed by Trump since his return to the White House. The so-called Liberation Day, on April 2nd, 2025, Trump announced an unprecedented wave of tariffs in the last century to try to compensate for the US's large trade deficit with other nations.
However, the measure was overturned by the courts, leading Trump to establish new temporary rates at the beginning of this year, replaced by a third trade wall, backed by a regulation against forced labor, in July. Earlier this week, Trump threatened to permanently break trade ties with all countries that have a deficit with the US if the Federal Reserve does not lower interest rates.
The tool he referred to, which has judicial backing independently, is precisely the trade veto, introduced with Canada on Wednesday.
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