Trump hits Canada with 50% tariffs over US alcohol ban
US President Donald Trump has imposed 50% tariffs on selected Canadian imports, accusing the country’s provinces of discriminating against American alcoholic beverages. The White House said the move is intended to pressure Canada into lifting restrictions that have slashed US alcohol exports by more than 80%.
President Donald Trump has signed a proclamation imposing additional 50% tariffs on certain Canadian imports, escalating the trade dispute between the two countries over Canada’s restrictions on US alcoholic beverages.
The duties, which target around US$20 billion worth of Canadian goods, will take effect from 19 August.
The White House said the measures were introduced under Section 338 of the Tariff Act of 1930, which allows the President to impose duties on imports from countries found to be discriminating against US commerce.
White House targets provincial alcohol bans
In the proclamation, the administration argues that Canadian provinces unfairly singled out American alcohol after removing US products from government-controlled liquor stores and wholesale systems from March 2025.
Ontario’s Liquor Control Board (LCBO) and Quebec’s Société des alcools du Québec (SAQ) were cited among the organisations that stopped purchasing and distributing US wines, beers and spirits.
Only Alberta and Saskatchewan subsequently lifted their restrictions in June 2025.
According to The White House, Canadian imports of US alcoholic beverages fell by around 81% between March 2025 and February 2026 compared with the same period a year earlier, dropping from approximately US$718 million to US$137m.
The administration also argued that Canada continued to import alcohol from other countries, claiming shipments from Chile, Japan, Argentina, Ireland, New Zealand and Australia all increased over the same period. Imports from European Union member states also rose by more than US$100m, according to the proclamation.
Tariffs intended to pressure Canada
Trump said the new duties would offset what he described as Canada’s “unreasonable, unequal and discriminatory” treatment of US alcohol producers.
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The proclamation argues that Canadian restrictions have harmed American wineries, breweries and distilleries by suppressing exports, reducing manufacturing output and weakening investment in rural communities.
The White House said imposing additional tariffs could encourage Canada to remove the provincial restrictions while strengthening opportunities for domestic producers within the US market.
The new measures apply in addition to most existing duties, although certain products already covered by separate trade measures are exempt.
Dispute follows proposed CANADA Act
The latest escalation comes days after legislation was introduced in Congress calling for a formal investigation into Canada’s treatment of US alcoholic beverages.
As previously reported by the drinks business, Republican congresswoman Claudia Tenney proposed the Combating Attacks on our National Alcoholic Drinks by Allies (CANADA) Act, which would require the US Trade Representative to launch a Section 301 investigation into Canadian provincial restrictions.
Tenney argued that Canadian liquor boards had unfairly targeted American producers over a wider trade dispute unrelated to the drinks sector.
The proposed legislation received backing from the Wine Institute, WineAmerica and the American Craft Spirits Association.
Industry caught in wider trade war
Canada’s restrictions were introduced in response to tariffs imposed by the United States during the wider trade dispute that began last year.
Since then, nearly all Canadian provinces removed US alcoholic beverages from government-controlled retail outlets and distribution networks, prompting domestic producers and exporters from other countries to fill the resulting gap.
The measures have had a profound impact on American producers, for whom Canada had been the largest export market for US spirits and one of the country’s most valuable destinations for wine and beer.
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