The latest escalation in the months-long trade war between the two historic allies follows Canada's imposition of dollar-for-dollar retaliatory tariffs on US steel, clothing and furniture, which took effect after midnight on Tuesday. The White House had previously imposed 50% tariffs on around $20bn of Canadian goods last month.
Canadian Prime Minister Mark Carney said in a video address that his country's pivot away from the US as its largest trading partner 'will come at a cost.' Canada's Trade Minister Dominic LeBlanc described the US measures as 'unjustified' and said he would work to protect Canadian workers, families and businesses. 'Our core focus is on what we can control: building strength at home, diversifying our partnerships abroad, and building Canada strong for all Canadians,' LeBlanc said, adding that he had contacted his US counterpart and promised to work 'in good faith' to resolve tensions.
The White House justified the import ban by stating that Canada restricts the distribution of US goods while not applying the same restrictions to products from other countries. According to UN data, Canada's exports of alcoholic spirits to the US were worth US$687m in 2025, dairy products $269m and motorbikes $90m.
However, Stephen Brown, chief North America economist at Capital Economics, noted that the import ban covers only about 0.25% of Canada's total exports to the US. 'Nonetheless, Trump's willingness to impose an import ban is further evidence, if it were needed, that these latest measures are about inflicting economic pain rather than raising revenue,' Brown said.
Tensions have also spilled beyond tariffs. In August, Trump ordered Lake Ontario to be renamed Lake America, drawing widespread criticism from Canadians and some Americans. Both sides have expressed a desire to reach a trade deal, but no new talks have been scheduled since negotiations broke down in late August.