President Donald Trump's administration has dropped punitive tariffs on imported Canadian cement, toilet paper and other products after acknowledging negative impacts on US consumers.
But Trump's administration doubled down on confrontation with Ottawa, introducing an outright ban on imports of Canadian alcohol and motorcycles.
Trump's conflicts with US foreign trade partners have frequently featured revisions to the lists of affected products after complaints from US consumers and industrial groups. Trump's punitive tariffs on Canada and Ottawa's countermeasures do not apply to energy, potash fertilizer or critical minerals.
The US on 22 August began collecting new 50pc tariffs on about $28bn of Canadian imports, including cement, plywood and paper. Trump late on Tuesday ordered modifications to the list of affected products, eliminating the 50pc tariff on Canadian cement, rock salt and toilet paper beginning on 15 September.
Trump instead ordered a 50pc tariff on a variety of other Canadian imports, including iron and steel columns and some aluminum byproducts, effective from 15 September.
The prohibition on imports of Canadian alcoholic beverages and Canada-manufactured motorcycles will go into effect from 29 September.
"Canada walked away from a near-final trade deal that offered better treatment than any other trading partner, and instead Canada chose to embark on senseless retaliation," US trade representative Jamieson Greer said.
Canada's retaliatory tariffs on US steel and aluminum went into effect on Tuesday.
Canadian prime minister Mark Carney has said that trade talks between the two countries collapsed because the US had made unreasonable demands. "They wanted us to become even more reliant on them, not less," he said on Tuesday.
Carney said last week he would be ready to resume trade dialogue once the US "starts being serious".
The latest trade escalation is taking place as Trump is set to convene an unusual, mid-term Republican party convention in Dallas, Texas, in a bid to shore up his party's fortunes ahead of the 3 November midterm elections. The event, which Republican party officials describe as a "Trump-a-palooza", aims to highlight Trump's economic and geopolitical accomplishments since returning to office last year.
"This election comes down to one simple choice: lower costs, lower taxes, secure borders, and common sense," Republican National Committee chairman Joe Gruters said on 5 September.
Less than two months before the elections, polls indicate that Democrats are likely to wrest control of at least one chamber, if not both, in part because of voters' concerns over rising inflation. The US inflation rate earlier this summer reached three-year highs, largely because Trump's war with Iran pushed up US retail fuel prices. US retail gasoline prices averaged $4.16/USG in the week ended on 7 September, up by around 40pc from late February, when the US and Isreal launched an attack on Iran.
Higher tariffs have also contributed to an increase in US consumer prices.
Higher inflation has undermined Trump's rationale for calling on the US Federal Reserve to slash its target interest rate. Trump last week threatened to introduce import bans on key US trade partners, including Canada and the EU, unless the Fed cuts interest rates.
The US Supreme Court in February ruled that Trump's 2025 decisions to arbitrarily impose tariffs on any country had been illegal. But that ruling also pointed out that Congress explicitly gave the White House the legal power to impose an outright embargo on trade with any country. Trump since then has frequently touted that newly discovered prerogative, even though he has denounced the Supreme Court's tariff decision.
The import ban on select Canadian products would mark the first exercise of that prerogative.
