The US has announced plans to impose a 50% tariff on a range of Canadian goods including alcohol and dairy products.
A statement from The White House yesterday (20 July) said the move was “in response to Canada’s discriminatory treatment of American products”.
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The US is looking to put the additional duties in place from 19 August.
A “proclamation” from President Trump said he was launching the tariffs through Section 338 of the Tariff Act of 1930, allowing duties to be imposed “to offset the burden or disadvantage from a foreign country’s discrimination against or unequal imposition on the commerce of the United States”.
The move follows the US refusing to renew the USMCA trade agreement it has with Canada and Mexico two weeks ago.
Reacting to the planned 50% tariff, Canadian Prime Minister Mark Carney said: “This is the latest in a series of unilateral US trade actions that began with the US imposing a series of tariffs in direct violation of the Canada-United States-Mexico Agreement (CUSMA), the free trade agreement between Canada, the United States, and Mexico.”
He added: “Recognising that the US has been transforming all of its trade relationships, including those covered under CUSMA [USMCA], over the past 18 months, Canada has made a series of detailed and comprehensive proposals to resolve this dispute and to modernise CUSMA. We stand ready to intensify those discussions in the coming weeks.”
Trade tensions have escalated between the two countries over the past 18 months.
Canadian provinces including Ontario and Quebec started pulling US alcohol from their shelves in March 2025 as a response to US tariffs on Canadian goods.
Alberta and Saskatchewan provinces ended their bans three months later. Some provinces have started selling existing stockpiles of US alcohol but orders and sales remain restricted in other parts of the country.
Earlier this month, a Republican congresswoman filed a bill looking to prompt an investigation into the US alcohol ban still in place in multiple Canadian provinces.
“Specifically, Canada unreasonably burdens and disadvantages US alcoholic beverages but not alcoholic beverages of other countries,” Trump said in his statement on Monday.
“The United States, US businesses and workers, and US commerce suffer from the Canadian provinces’ and territories’ unreasonable and unequal impositions and discriminations with respect to US alcoholic beverages.”
Trump added: “The Canadian provinces and territories have not instituted or maintained similar bans or restrictions on any other country since March 2025, thereby benefitting other countries at the expense of the United States.”
Alcoholic goods affected by the new tariff will include whisk(e)y and brandy, as well as wines, beer and cider.
Chris Swonger, the CEO of the Distilled Spirits Council of the United States (DISCUS), said: “For nearly a year and a half, American spirits have been pulled from store shelves across much of Canada as collateral damage in a broader trade dispute unrelated to our sector, and we appreciate the Administration’s recognition of the significant damage these restrictions have caused US distillers.
“We had hoped, however, that this issue could be resolved without further escalation. Imposing a 50% tariff on imported spirits from Canada deepens trade tensions and raises the risk of further retaliation at a time when many US hospitality businesses continue to face financial hardships.”
Dairy products that will face the 50% tariff include milk and cream in various forms (e.g. powdered or non-solid), as well as dried whey and whey protein concentrates.
In a separate note on the dairy tariffs, Trump criticised Canada’s tariff-rate quota that the country implements on cheese under the USMCA free-trade agreement.
While Canada has a TRQ on cheeses under the USCMA as well as under its trade deal with the EU (the CETA), the President said “Canada does not have the same eligibility criteria for the USMCA and the CETA, disfavouring the commerce of the United States”.
“While Canada’s eligibility criteria for the USMCA dairy TRQs – and specifically, the cheeses of all types TRQ – do not allow retailers to obtain and use TRQ quantities, the eligibility criteria for the CETA do grant retailers access to the TRQ quantity for cheese of all types,” Trump’s statement said.
The 50% tariff will also be applied to a range of goods such as “natural honey” and “mixes and doughs for the preparation of bakers’ wares”, in response to Canada’s tariffs on US motor vehicles which are exempt from the USMCA.
