Trump Hits Canada with 50% Tariffs on Alcohol, Autos as Dairy Fight Escalates

The White House slapped additional tariffs of up to 50% on Canadian alcohol and motor vehicle exports late Monday, citing discriminatory trade practices, and separately confirmed a broader 50% duty on certain Canadian products. The fresh round of duties lands in the middle of an already fraught USMCA review process and risks reopening a trade fight that had partially cooled earlier this year.

Alcohol has been one of the most persistent flashpoints in the relationship. Since March 2025, eight of Canada's ten provinces have kept American beer, wine and spirits off the shelves of government-run liquor stores, a response to earlier US tariffs that has cut deeply into US producers' access to the Canadian market. US trade officials have repeatedly called the bans discriminatory and unjustified, and legislation introduced in Congress earlier this month sought to direct a formal investigation into the practice. Dairy is a similarly contentious front, with Washington long objecting to Canada's supply management system and the tariff rate quotas that govern US access to the market, an arrangement Canada has legislated to keep largely fixed in place.

The motor vehicle sector adds a third front to the dispute. The industry already operates under a 25% US tariff on non-US content in USMCA-compliant vehicles, layered on top of broader 50% duties on steel and aluminum and a 10% duty on lumber that have remained in place through the review period. Extending additional duties to autos threatens to complicate an already tightly integrated supply chain that automakers on both sides of the border had been lobbying to simplify rather than further restrict.