What Impact Will the New US Import Bans Have on Canada?

Canada–U.S. trade tensions entered a new phase as the United States imposed import bans on certain Canadian products.

The latest measure was announced on Sept. 8, on top of other measures Washington took against Canada, as Ottawa proceeded with imposing its counter-tariffs on the United States.

While the import bans are on a limited number of products, they would be devastating to the targeted sectors, and also would lead to further economic uncertainty and businesses leaving Canada, economists say.

The U.S. administration says the new measures are necessary to “level the playing field” with Canada when it comes to trade, while Ottawa maintains that U.S. actions are unjust and merit retaliation.

Risks Facing Canadian Exporters

University of Calgary economics professor Trevor Tombe on Sept. 8 estimated the value of Canadian products affected by the new U.S. import bans to be around $1 billion.

“The U.S. move here was pretty modest,” Tombe said on a social media post the next day.

However, other economists point out that the specific targeted sectors will be hit hard, while the overall trade restriction measures further add to uncertainty facing Canadian businesses.

Ian Lee, associate professor at Carleton University’s Sprott School of Business, said the upcoming import bans, which go into effect on Sept. 29, are a disaster for Canadian exporters in the affected categories. The banned product categories include most alcohol, non-alcoholic beer, some dairy products, and motorcycles.

“For the Canadian exporters, it’s catastrophic because you just lost your biggest market outside of Canada,” Lee told The Epoch Times. “That would certainly incentivize them to look now at relocating their business or part of their business to the United States.”

Lee noted that the bans are a clear signal the Trump administration is prepared to inflict real pain on Canada to use as leverage in trade negotiations.

“When you start issuing bans, I think you’re upping the ante, you’re upping the stakes,” he said. “They’re signalling to the Canadians that they’re serious.”

Sylvain Charlebois, a professor at Dalhousie University and director of its Agri-Food Analytics Lab, said he hopes a resolution is reached before the bans go into effect.

“Hopefully we won’t get there and cooler heads will prevail. But I seriously doubt it,” he told The Epoch Times. “It’s quite concerning what’s going on right now.”

Charlebois said that while in terms of quantity the bans would have the most significant impact on alcoholic products, there would also be significant damage to ingredients exported by Canada’s dairy industry as well as specific concentrated products sectors like molasses.

Washington’s latest measures are in response to Canada introducing counter-tariffs on nearly $28 billion worth of American products, which were retaliation for the United States imposing new tariffs on nearly the same volume of Canadian good beginning on Aug. 22. They came following the breakdown of trade talks between the two sides on Aug. 21, with each side blaming the other for the collapse of the talks.

Washington also said on Sept. 8 that it is adjusting its list of products that are subject to the new 50 percent tariffs, adding some while removing some others, and keeping the total value at around the US$20 billion (CA$28 billion) mark. Some of the products now subject to the new U.S. tariffs are all-terrain vehicles and motorboats, while some of the ones no longer subject to those tariffs are road salt and cement. Canada has also similarly adjusted its list of counter-tariffs after hearing from domestic industries, including seafood, while keeping the total value at around CA$28 billion.

Since Canada announced its intention to impose counter-tariffs, U.S. President Donald Trump has announced further measures targeting Canada, including banning the sale of products made by Montreal-based aviation giant Bombardier in the United States unless they’re made in that country, and excluding Canada from certain U.S. government procurement projects. He said he will also impose new 50 percent tariffs on Canadian vehicles and auto parts beginning in 2027.

This is while Washington’s other sectoral tariffs, including on aluminum, steel, copper, and lumber, as well as tariffs on non-CUSMA (Canada-United States-Mexico Agreement) remain in effect. The trade deal that collapsed on Aug. 21 was meant to provide tariff relief on these sectors.

‘Capital Flight’

Lee said “capital flight” leaving Canada for the United States is likely to increase as a result of the new U.S. tariffs and import bans, while some Canadian businesses are at the risk of going under.

“A small or mid-sized company is much more vulnerable to these tariffs and bans than a big company, because a big company has lots of diverse sources of revenues, diverse product lines, diverse markets,” he said, noting that Canada has nearly 50,000 exporters and close to 72 percent of Canadian merchandise exports went to the United States in 2025.

Statistics Canada reports that 97.4 percent of exporters in 2024 were small and medium-sized enterprises, defined as having fewer than 500 employees.

“Manufacturing in Southern Ontario? They’re going to get hammered, starting with the obvious one, the car industry,” Lee said.

Tombe said the alcohol sector is likely to be hit particularly hard by the ban as it will apply to just over 90 percent of all Canadian alcohol exports to the United States.

“Tough to be precise, but roughly 13% of all Canadian booze production is exported to the U.S. So, this is a large impact on that sector,” Tombe wrote Sept. 8 on X.

Similar to Lee, Charlebois also said relocation will become an increasingly likely option for some companies targeted by the 50 percent U.S. tariffs and those hit by the upcoming import ban.

“If you’re a Diageo [beverage company] and you have to decide between a market of 400 million people versus 41 million, numbers are stacked against us,” Charlebois said, referring to the multinational alcohol company that produces Crown Royal.

Charlebois also said “a lot of food companies will be forced to make a decision” and “some companies will be forced to make that difficult choice” as bans and tariffs kick in.

Japanese brewer Sapporo recently said it is considering moving some of its non-alcoholic beer production from Canada to the United States in 2027, citing new U.S. trade measures, although it said no final decision has been reached.

Automaker Stellantis said in October 2025 that it was moving production of the Jeep Compass from its Brampton, Ont., plant to Belvidere, Ill., as part of a growth of U.S. production. The automaker is also considering selling the Brampton plant entirely, according to an autoworkers union.

Impact on Individuals

Lee said while Canada’s counter-tariffs add to consumer costs for Canadians, the loss of U.S. sales could also have some blowback on prices for consumers.

“If you’re an exporter and your market has just gone down because 30 percent of your market has vanished because they’re banning you from exporting to the States, then that means you’ve got to cover all of your costs in your plant,” he said, adding that they may have to pass on those costs to Canadian consumers.

Charlebois said while some surveys show that the majority of Canadians have backed retaliatory measures by Ottawa against U.S. tariffs, that may change if the impact of the trade actions begin to trickle down in the form of economic hardship.

“The issue of economic pain for most Canadians is abstract,” he said. “I suspect that at some point, when people are going to start feeling personal pain, they’re probably going to call the PMO [Prime Minister’s Office] and say, ‘Enough is enough.’”

In support of this position, Charlebois referenced a Build Canada survey released Sept. 8, which found that 75 percent of Canadians supported continuing a retaliatory course in the trade dispute even if it brought economic consequences. However, 68 percent said if it brought a significantly higher risk of somebody in their household losing employment, they would no longer back such measures.

A separate Sept. 8 Angus Reid poll found that 60 percent of Canadians were willing to keep backing retaliatory trade measures even if household expenses went up by 20 percent, but found that support declined significantly as consequences became more personally damaging.

Uncertainty

Charlebois said he doesn’t expect “a huge impact early on” from the counter-tariffs on Canada’s food industry and food prices. And he says the impact is likely to be less than that from Canada’s 2025 retaliatory tariffs, which hit more consumer-ready products.

However, he said the continuing uncertainty around U.S.–Canada trade makes it difficult for Canadian businesses to plan production and attract investment.

“I think the biggest problem right now is uncertainty,” he said. “We don’t have a deal with the U.S. We don’t know what can happen today or tomorrow or the next day.”

Calling the retaliatory tariffs “a net negative” on Canada, Lee said it isn’t the specific tariffs but rather the “trend and direction” they are heading and potential further escalation that has him further worried.

“I’m really worried that we’re going to wake up one morning and find that Trump has said, ‘OK, that’s it. I’m cancelling and abrogating CUSMA [Canada-U.S.-Mexico Agreement],” Lee said. “That’s what terrifies me and wakes me up at night.”

He said Canada should be focused on developing and exporting more of its resources including energy to allies around the world, instead of trying to compete on manufactured goods with the United States, whose economy is much less dependent on international trade than Canada’s.

Lee projected that Canada will inevitably have to make some concessions in order to reach a deal with the United States. He says Canada should keep in mind the “the ultimate prize” instead of walking down the path of a trade conflict.

“The ultimate prize is continued perpetual access to the largest economy in the world,” Lee added.