Trump Escalates Canada Trade War, Imposes 50% Tariffs in Response to Ban on American Booze

President Donald Trump walks down the stairs of Air Force One upon his arrival Sunday, July 19, at Joint Base Andrews, Maryland. (Photo: Luis M. Alvarez, AP Photo)

President Donald Trump on Monday escalated the trade dispute with Canada’s alcohol restrictions, signing a proclamation that will impose an additional 50% tariffs on certain Canadian imports beginning Aug. 19, arguing the move is necessary to counter what he called discriminatory treatment of American alcoholic beverages.

The proclamation centers on the ongoing removal of U.S. beer, wine and spirits from Canadian government-run liquor systems, which began in March 2025 after Canada responded to U.S. tariffs with a coordinated boycott of American alcohol.

Trump invoked Section 338 of the Tariff Act of 1930, a rarely used trade provision that allows the president to impose duties on imports from countries that discriminate against U.S. commerce. The White House argues Canadian provinces have unfairly targeted American alcohol while continuing to import products from other countries.

“Canada has imposed an unreasonable regulation or limitation on articles wholly or in part the growth or products of the United States and is discriminating in fact against the commerce of the United States,” the proclamation states.

According to the administration, U.S. alcohol exports to Canada fell approximately 81% between March 2025 and February 2026, dropping from roughly $718 million during the previous 12-month period to about $137 million.

The proclamation also argues that while U.S. products disappeared from Canadian shelves, imports from countries including Chile, Japan, Argentina, Ireland, New Zealand and Australia increased between 13% and 26%, with European Union producers capturing more than $100 million in additional sales.

The move marks the latest escalation in a trade dispute that has become increasingly focused on alcoholic beverages.

In recent weeks, lawmakers from California have urged Quebec to restore sales of American wine, warning the restrictions have cost U.S. producers hundreds of millions of dollars. Separately, Rep. Claudia Tenney (R-N.Y.) introduced the proposed CANADA Act, which seeks a formal U.S. trade investigation into Canada’s provincial alcohol restrictions.

Trump’s proclamation argues the new tariffs are intended to pressure Canada into reversing its alcohol bans while protecting American distillers, wineries and breweries from lost export opportunities.

“When U.S. producers are unfairly denied export opportunities, as they are in Canada due to Canadian provinces’ and territories’ bans on the purchase, distribution, or retailing of U.S. alcoholic beverages, they lose sales that support production in the United States,” the proclamation states.

The additional 50% duties will take effect at 12:01 a.m. EDT on Aug. 19 unless modified or withdrawn. The proclamation states the tariffs will apply to products identified in an accompanying annex, while certain goods already subject to other trade actions are excluded.

Canada has repeatedly defended its alcohol restrictions as retaliation for U.S. tariffs and has indicated the measures will remain in place until those tariffs are lifted. Ontario Premier Doug Ford and Quebec officials have both recently reaffirmed they have no plans to return U.S. alcohol to store shelves under current trade conditions.

The latest action further deepens a dispute that has significantly disrupted one of the largest export markets for American spirits, wine and beer, with industry groups on both sides of the border continuing to call for a negotiated resolution.