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Canada retaliated with tariffs. Now many of its alcohol and dairy goods are banned.

Photo: Daniel Torok / Public domain (source)

Canada Retaliated With Tariffs. Now Many of Its Alcohol and Dairy Products Are Banned From America

by
M.A. Rothman

By M.A. RothmanSeptember 29, 2026 · 5 min read
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As of 12:01 a.m. Eastern time on Tuesday, Sept. 29, 2026, certain Canadian alcoholic beverages, dairy products and other goods are barred from entering the United States. The import bans, signed by President Trump on Sept. 8, are Washington’s answer to Canada’s decision to hit back at American tariffs with roughly $20 billion in retaliatory duties of its own.

Ottawa bet it could escalate and absorb the consequences. Starting today, some of its exporters no longer have access to their biggest customer at any price.

How it got here

The fight has been building all summer. On July 20, the White House announced three proclamations under Section 338 of the Tariff Act of 1930 imposing 50 percent tariffs on Canadian goods ranging from wine to hockey sticks to cement. The administration’s case rested on three areas where it says Canada discriminates against American commerce: cars, alcohol and dairy.

On alcohol, the White House fact sheet noted that all but two Canadian provinces and territories “have halted the purchase, distribution, or retailing of U.S. alcoholic beverages.” According to the administration, Canadian imports of American alcohol fell about 81 percent, or $582 million, from March 2025 through February 2026. On dairy, it said Canada’s cheese quotas are “much more restrictive than the tariff-rate quotas” Canada applies to cheese from the European Union.

Talks between the two governments stalled in August, when Prime Minister Mark Carney said Canada had walked away from a bad deal. Canada, meanwhile, imposed new retaliatory tariffs on about $20 billion in American exports, including steel, dairy and agricultural equipment, according to the White House.

On Sept. 8, Trump signed five proclamations in response. The alcohol proclamation found that Canadian authorities had “maintained the discrimination” and had announced additional retaliation against American alcohol. It pointed to Saskatchewan, one of only two provinces that had not banned American alcohol outright, which “announced that it would impose an additional 50 percent levy on U.S. alcoholic beverages.”

What is banned and what is taxed

The bans apply to goods imported on or after 12:01 a.m. Eastern on Sept. 29. Under the proclamations, certain Canadian alcohol, dairy and other products already subject to the 50 percent Section 338 tariffs are now excluded from importation entirely. Reuters reporting carried by Fox television affiliates, and Global News, described the bans as also covering Canadian-made motorcycles.

According to Reuters reporting carried by Fox affiliates, the alcohol ban appears to cover beer, many wines, and spirits including whiskey, bourbon, rum, vodka, vermouth, tequila, mezcal and brandy. White House notices listed dairy-related items including whey protein, as well as molasses and non-alcoholic beer. Various cheese products, along with some paper, aluminum, wood, furniture and lighting products, were added to the list of goods facing the 50 percent tariff. The administration also added all-terrain vehicles and more dairy products to the tariff list and removed rock salt and cement.

Trump also directed the General Services Administration to work with the U.S. Trade Representative to “remove Canadian-origin products from GSA’s Multiple Award Schedules” “unless Canada restores full and fair reciprocity for American Farmers and Companies.”

Trump: “They feel entitled”

Speaking in the Oval Office on Monday, Sept. 28, hours before the deadline, Trump made clear he is not in a hurry to back down. “They feel entitled, and, you know, they get 95 per cent of the business they do with the United States,” he said, according to Global News. “There’s nothing they have that we need.”

The president has long argued that Canada’s dairy system punishes American farmers, and he has repeatedly said Canada charged them 400 percent tariffs. The Canadian Press, in an Aug. 25 fact check, said there is no flat 400 percent rate on Canada’s tariff list, but confirmed that over-quota tariffs on U.S. dairy products run between 241 and nearly 300 percent. Those are the products protected by Canada’s supply management system, which caps imports through quotas and slaps prohibitive rates on anything above them.

On trade share, The Canadian Press, citing Statistics Canada, put the U.S. share of Canada’s merchandise exports at 71.7 percent in 2025, down from 75.9 percent in 2024. That is not 95 percent, but it is still the large majority. The dependence runs overwhelmingly one direction. U.S. Trade Representative Jamieson Greer has said Trump is comfortable with the pause in talks and sees no urgency.

Canada’s reaction

The Canadian Chamber of Commerce’s Candace Laing called the measures “a tornado of changes at once, intended to overwhelm,” and said the U.S. is “seeking to make an example of Canada.” The office of Dominic LeBlanc, Canada’s minister for Canada-U.S. trade, said it would “take note of the coming into force” of the measures and that its priority is protecting “Canadian workers, farmers, families, and businesses.”

Industry groups were more alarmed. Spirits Canada said it is “very concerned” and that the consequences “could be significant”; about half of the industry’s nearly $2 billion in annual production ships to the United States, according to Global News. Dairy Farmers of Canada said it was “disappointed to see certain dairy exports targeted.” Statistics Canada reported just over $700 million in Canadian dairy exports to the U.S. in 2024.

Not everyone thinks the economic damage will be large. University of Toronto economist Joseph Steinberg told Global News the ban is more symbolic than a material hit. Carney has said Canada has no plans to escalate further.

The bottom line

For years, Canadian provinces pulled American bourbon and wine off their shelves and kept American dairy behind a wall of quotas and tariffs, while Canadian producers enjoyed open access to the largest consumer market on earth. Ottawa answered American tariffs with more tariffs and assumed the asymmetry would hold. The White House has now made the point the only way that seems to register: access to the American market is a privilege that comes with reciprocity.

Canada spent years locking American products out of its stores, and it just found out the door swings both ways.

Sources

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