US-Canada trade war: Donald Trump has banned Canadian alcohol

The trade war between the United States and Canada is intensifying: On Tuesday, US President Donald Trump banned imports of alcohol and various other products from the neighbouring country and increased tariffs on other goods.

Canadian Prime Minister Mark Carney is taking a firm stance and acknowledges that reducing economic ties with the United States will come at a cost, but maintains that the benefits will outweigh the inconvenience.

According to an executive order issued by Mr Trump late on Tuesday, from 15 September, various Canadian products – ranging from mattresses to motorboats and golf trolleys – will be subject to an additional 50 per cent tariff.

Under other executive orders issued at the same time, an import ban on various alcoholic beverages and certain dairy products, such as whey, will come into force on 29 September.

Canada’s retaliatory tariffs came into force earlier on Tuesday and apply to imports from the US worth 27.6 billion Canadian dollars (20 billion US dollars) worth of imports from the US, including steel and aluminium products and dairy products such as cheese, in response to the tariffs announced by Washington on 22 August.

“Canada has everything it needs to change course and prosper,” Mr Carney said in a video address. “Such a shift will come at a cost. Action always comes at a cost. However, this is nothing compared to the cost we would pay if we stood still.“

In response to Canada’s latest tariffs, Mr Trump promised to restrict Canadian companies’ ability to win US government procurement contracts.

On Monday, Mr Trump threatened to block sales by the Canadian company “Bombardier Aviation” in the US if the Quebec-based aircraft manufacturer does not relocate its production to the United States.

US tariffs pose a minor downside risk to the Canadian economy as a whole, but analysts note that they have a greater impact on the manufacturing sector in central Canada.

“I don’t think we need to escalate the conflict. That’s not constructive,” noted the Canadian Prime Minister. “However, our tariffs are necessary to protect our workers, businesses and communities. This is about who we are as Canadians.“

In response to Mr Trump’s latest move, Canada’s Minister of Trade with the United States, Dominic LeBlanc, stated late on Tuesday evening that Ottawa “is assessing the latest tariff measures”.

Negotiations between the two countries broke down on 21 August following several days of meetings in Washington. The Canadian Prime Minister then announced that he had decided to suspend the trade talks. At the time, he claimed that the Trump administration’s terms were ultimately unacceptable, adding that US negotiators had imposed restrictions on Canada’s trade agreements with other countries at the last minute. Since then, Ottawa and Washington have not resumed negotiations and continue to exchange barbed remarks.

In August, Mr Trump also signed an executive order renaming Lake Ontario, which lies on the border with Canada, “Lake America”. This sparked outrage in Canada, where Trump’s hostility provoked a wave of patriotism.

Almost 60 per cent of Canada’s imports consist of goods from the United States. The country exports around 70 per cent of its output to its neighbour.