The United States is ratcheting up a trade dispute with neighbouring Canada by imposing fresh import restrictions on a range of products from spirits and dairy to motorbikes.
In a series of executive orders Tuesday, US President Donald Trump accused Canada of discriminating against American businesses and announced restrictions that will take effect on September 29.
Canada’s effort to reduce its reliance on the US as its biggest trading partner would have consequences, Canadian Prime Minister Mark Carney said in a video address on Tuesday.
Both governments have said they want to reach a trade deal, but since talks broke down in late August, they have not scheduled any new talks.
The measures are the latest development in a months-long trade dispute between close allies and important trading partners, the US and Canada.
The US is especially important to Canadian businesses because they send more than two-thirds of the typical Canadian export mix to the US. Canada is also the U.S.'s second largest trading partner, after Mexico, although the U.S. economy has a more diversified export base.
Businesses on both sides of the border have warned the row could push up prices and hit demand.
Last month, the White House imposed tariffs of up to 50% on about $20bn (£14.8bn) of Canadian goods after talks broke down. The measures affected industries such as furniture, wine and some sporting and fishing equipment.
Canada responded with tariffs on an equivalent amount of U.S. goods, including steel, clothing and furniture. The retaliatory tariffs took effect after midnight Tuesday.
By limiting U.S. imports, Canada was treating U.S. goods differently than goods from other countries, the White House said.
The latest US measures ban some Canadian products, including whey and non-alcoholic beer, outright from import, while tariffs on other products, including cheese and motorboats, have been increased.
Trump also warned Monday that Canadian aircraft maker Bombardier could face more restrictions in the U.S. unless it moved its manufacturing operations to the U.S.
The dispute comes as the Trump administration continues to use tariffs and other trade measures to address what it views as unfair trade practices and trade imbalances.
Businesses and trading partners have raised concerns about the measures, and some Canadian consumers have responded by boycotting US products. For example, some Canadian stores have pulled US alcoholic beverages off their shelves.
Deborah Elms, a trade expert at the Hinrich Foundation, told the BBC the new restrictions could hit Canadian businesses that rely on US customers hard. But early estimates pointed to a relatively limited direct impact of about $1bn in goods, she said.
Canada would likely stick with its current approach for now but would adjust business-support measures in response to the latest US moves, Elms said.
She also asked whether the new restrictions would help get the two governments back to the negotiating table.
“The bigger question is what it’s going to take to get the two sides back together again,” Elms said. “The language in these proclamations, for instance, is not helpful in getting to the negotiating table.
