After Canada’s retaliatory tariffs took effect, US President Donald Trump escalated further. He signed executive orders on Tuesday banning several Canadian imports, including certain alcohol, dairy and motorcycles. The new orders will take effect on September 29. Trump also moved to block Canadian firms from US government contracts. The new tariffs, retaliatory tariffs and countermeasures are leaving plenty of uncertainty on households and businesses on both sides of the border.

• The ban covers Canadian whey and molasses products, non-alcoholic and malt beer, wine, cider, and liquor such as vodka, rum, gin and tequila, plus motorcycles and mopeds.
• The White House says the move responds to Canada’s “discriminatory treatment” of US alcohol, autos and dairy.
• Trump directed US agencies to stop buying products originating in Canada, citing a lack of reciprocity in government purchasing.
• Starting on September 15, the US is adding items like aluminum bars, bamboo furniture and mattresses to its 50% tariff list, while dropping tariffs on others, including bed sheets, sugar and toilet paper.
• Canada appears to be looking to strengthen its relationship with Europe. Bloomberg reports Canada and the European Union (EU) are working on a far-reaching alliance spanning trade, security and critical minerals. European Commission President von der Leyen is expected to unveil the plan on September 16.

The new countermeasures signal an escalating standoff. Canada’s trade minister says formal negotiations aren’t currently underway, though informal discussions continue. Expect continued volatility in trade-exposed sectors as this dispute plays out. Consumer and business confidence could be negatively affected by uncertainty about the short- and long-term impact on Canada’s economy.

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