The US is banning a slew of Canadian products, including alcoholic spirits, dairy goods and motor vehicles, as Canadian retaliatory tariffs on American goods come into force.
In a series of executive orders on Tuesday, US President Donald Trump said that Canada is “discriminating” against the United States and outlined the import ban, to begin 29 September.
Earlier on Tuesday, Canada 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”.
Both US and Canadian officials have said they would like to strike a trade deal, but no new talks have been scheduled since negotiations collapsed in late August.
The BBC has contacted the office of the Prime Minister of Canada, Mark Carney, for comment.
The White House’s new sanctions are the latest strike in a months-long trade war between the US and Canada. The sides have historically been close allies, with each a key business partner to the other.
The US is Canada’s largest trading partner – generally more than two-thirds of its total exports go to its neighbour.
On the other hand, Canada is the US’ second-largest trading partner, after Mexico, although its exports are far more diversified.
Business owners on both sides of the border have expressed fears over the trade war’s fallout. Many expect prices of goods to rise and the number of customers to fall.
Last month, the White House had imposed 50% tariffs on around $20bn (£14.8bn) of Canadian goods after several rounds of talks had broken down.
Those tariffs hit sectors including Canada’s furniture and wine industries, as well as sporting and fishing equipment businesses.
Canada responded with dollar-for-dollar retaliatory tariffs on US goods like steel, clothing and furniture. The counter-duties came into effect after midnight on Tuesday.
Canada is “discriminating” against US businesses by restricting the distribution of US goods while not doing the same to such products from other countries, the White House said when announcing the new import restrictions on Tuesday.
The response targets various alcoholic drinks and dairy products like whey, according to a series of White House statements signed by the president.
On Monday, Trump hinted at more trade restrictions to come, warning Canadian aircraft company Bombardier that it would no longer be able to sell its products in the US unless it moves manufacturing there.
Trump has long believed that tariffs will help reduce trade imbalances between the US and other countries, but his wide-ranging tariffs scheme has upset many of the States’ traditional allies.
Tension between the US and Canada have now also expanded beyond tariffs.
In August, Trump ordered Lake Ontario to be renamed as Lake America, resulting in uproar from Canadians and some Americans.
