Canada is “discriminating” against US businesses by restricting American goods while not doing the same to the same products from other countries, the White House said when announcing the new import restrictions on Tuesday.
Some products, like whey and non-alcoholic beer, have been banned from import entirely, while tariffs have been further hiked for others, including cheeses and motorboats.
Washington has targeted “significant industries” for Canada, including its politically influential dairy businesses, said economics lecturer Scott French from the University of New South Wales in Australia.
Trump has previously argued that Canada’s system – which has production quotas, set pricing, and import limits on dairy, eggs, and poultry – is unreasonable to US farmers.
The import bans and new tariffs will also put Canada’s leaders under more pressure to resist Trump’s demands for concessions, French said.
The trade war will be “costly for both sides due to the historical level of integration of the North American economy,” he said, adding that consumers on both sides will end up as “the biggest losers”.
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 levies have upset many of the States’ traditional allies.
Some Canadians have led a massive boycott of US products like alcohol, which have vanished from some store shelves after Trump launched his global tariff campaign last year.
Trade expert Deborah Elms, from the Hinrich Foundation, told the BBC the import ban could have a “strong” impact on any Canadian business with US buyers, though early estimates show a “modest impact” affecting around $1bn worth of goods.
Canada will likely “hold course for now” and adjust their business support measures to account for the US’ latest moves, Elms said.
“The bigger question is what it will take for the two sides to sit back down together. The language in these proclamations, as an example, isn’t helpful in getting to the negotiating table,” she added.