Ag Policy Blog

WASHINGTON (DTN) -- The United States is moving from retaliatory tariffs on Canadian whey, molasses, alcohol and other products to outright import bans after Canada imposed new retaliatory tariffs on U.S. exports.

The administration is using Section 338 of the Tariff Act of 1930 to "exclude from importation" certain Canadian products from entering the U.S. market, saying the action is intended to offset what the U.S. views as discriminatory Canadian trade measures that disadvantage American commerce.

"After weeks of good-faith and intensive efforts between U.S. and Canadian negotiators, 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 against the United States," U.S. Trade Representative Jameson Greer said.

The list includes a range of alcoholic beverages, including grape wine, vermouth, malt beer, cider, bourbon, whisky, rum, vodka and tequila, generally in containers of 4 liters or less. The bans are scheduled to take effect Sept. 29.

Canada's retaliatory tariffs target approximately $20 billion worth of U.S. goods, including dairy products, agricultural equipment and electronics.

The highest rates of 50% tariffs were applied to steel, iron and aluminum.

The dairy dispute has divided sectors of the U.S. industry, with some dairy producers and exporters supporting tariffs as leverage to address Canada's dairy import quota system and increase U.S. market access. Those who utilize dairy products in the beverage and baking sector at the best market price seek zero tariffs to avoid an increased cost of production.

The National Milk Producers Federation and U.S. Dairy Export Council said earlier this month they have "urged the administration to prioritize resolution of Canada's chronic TRQ (tariff-rate quota) underfill and its habit of exploiting loopholes to sidestep USMCA dairy protein disciplines as part of the ongoing USMCA Joint Review. These new tariffs reflect that sustained engagement translating into heightened leverage."

The U.S. ban on Canadian whey targets $25.3 million of incoming product, which makes up 45% of the imported whey market, according to 2024 data from Observatory of Economic Complexity.

On alcohol, The Distilled Spirits Council of the United States said Canadian provinces' removal of U.S. spirits from store shelves caused U.S. spirit exports to Canada to fall by more than 70%.

The new import bans cover nearly $680 million worth of spirits from Canada, according to United Nations COMTRADE data. An additional $220 million in fermented beverages, including grape wine and malt beer, are imported from Canada and included in the ban.

North America now faces multiple trade challenges, including the ongoing tariff dispute with Canada, separate trade negotiations with Mexico, Commerce Secretary Howard Lutnick's planned return to Mexico this week for talks, and uncertainty surrounding the future of the U.S.-Mexico-Canada Agreement.

-- Dairy Import Ban List: https://www.whitehouse.gov/…

-- Alcohol Import Ban List: https://www.whitehouse.gov/…

Jake Zajkowski can be reached at jake.zajkowski@dtn.com

Follow him on social platform X @jzajkow

(c) Copyright 2026 DTN, LLC. All rights reserved.