Trump imposes 50% tariffs on Canadian imports over alcohol restrictions

USA – US President Donald Trump has signed a proclamation imposing an additional 50% tariff on certain Canadian imports, escalating the trade dispute between the two countries over Canada’s restrictions on American alcoholic beverages.  

The new duties, which target approximately US$20 billion worth of Canadian goods, will take effect on August 19. According to the White House, the tariffs were introduced under Section 338 of the Tariff Act of 1930, which authorises the President to impose duties on imports from countries found to be discriminating against US commerce.  

The administration argues that several Canadian provinces unfairly targeted American alcohol after removing US wines, beers and spirits from government-controlled liquor stores and wholesale distribution systems beginning in March 2025.  

Ontario’s Liquor Control Board (LCBO) and Quebec’s Société des alcools du Québec (SAQ) were identified among the organisations that stopped purchasing and distributing US alcoholic beverages. Alberta and Saskatchewan later lifted their restrictions in June 2025.  

According to the White House, Canadian imports of US alcoholic beverages declined by approximately 81% between March 2025 and February 2026 compared with the same period a year earlier, falling from about US$718 million to US$137 million.  

The administration also stated that Canada continued to increase alcohol imports from other countries during the same period. It claimed shipments from Chile, Japan, Argentina, Ireland, New Zealand and Australia all rose, while imports from European Union member states increased by more than US$100 million.  

Trump said the additional duties would offset what he described as Canada’s “unreasonable, unequal and discriminatory” treatment of US alcohol producers.  

The proclamation further argues that the provincial restrictions have harmed American wineries, breweries and distilleries by suppressing exports, reducing manufacturing output and weakening investment in rural communities.  

The White House added that the tariffs could encourage Canada to remove the restrictions while strengthening opportunities for domestic beverage producers in the US market.  

The additional duties will apply alongside most existing tariffs, although certain products already covered by separate trade measures are exempt.  

The latest escalation comes shortly after legislation was introduced in Congress seeking a formal investigation into Canada’s treatment of US alcoholic beverages. 

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 broader trade dispute unrelated to the alcoholic beverages sector. The proposed legislation has received support from the Wine Institute, WineAmerica and the American Craft Spirits Association.  

Canada introduced the provincial restrictions in response to tariffs previously imposed by the United States.  

Since then, nearly all Canadian provinces have removed US alcoholic beverages from government-controlled retail outlets and distribution networks, significantly affecting 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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