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The US Ban on Canadian Imports: What's Actually Covered 

The US Ban on Canadian Imports: What's Actually Covered 

President Trump signed five proclamations on September 8. According to a trade summary of the Federal Register notices, three exclude products from entry outright, and the other two change which goods fall under the 50% tariffs already in place.

The restrictions apply to goods entering the United States on or after September 29. Products that had already been imported before the deadline can remain in the country and can continue to be sold.

Think about a liquor store that received a shipment of Canadian whisky in August. The store can still sell those bottles. The new rule doesn't require the retailer to pull them off the shelf simply because the products are Canadian.

The problem comes when the store sells those bottles and tries to place another order.

If the Canadian whisky falls under one of the affected tariff lines, the supplier may no longer be able to ship it into the United States under the same rules. The store could then have to find another source, switch to a different product or wait for the trade rules to change.

This also means consumers may not notice an immediate shortage. Existing inventory can keep products available for a while. The impact is more likely to become visible as distributors and retailers work through their existing stock.

The same situation applies to manufacturers that use Canadian ingredients. A food company may have enough whey or molasses in its warehouse to keep production running normally for a period of time. But when it needs to place its next order, it may have to find a supplier elsewhere.

How this got here

The US says Canada discriminates against American commerce, pointing to how it handles US alcohol and the dairy quotas that limit American cheese. US Trade Representative Jamieson Greer called the moves a "natural consequence of Canada's continued discriminatory treatment," according to CNBC.

The timeline moved fast. Section 338 duties were first announced on July 20, took effect on August 22 after a short suspension, and talks between the two governments collapsed soon after. On September 8, Canada's retaliatory tariffs on about C$27.6 billion (roughly US$20 billion) of US goods took effect, hitting more than 700 products including steel, dairy, farm equipment, pulp and paper, and electronics. Trump signed the five proclamations the same night.

The latest restrictions are therefore part of a much bigger trade dispute between the United States and Canada.

The disagreement has been building around several issues, including market access for American products in Canada. US officials have particularly pointed to Canada's treatment of American alcohol and its dairy system, including quotas that limit how much US dairy can enter the Canadian market.

Canada, meanwhile, has responded with tariffs on American products. Those Canadian tariffs cover a wide range of US goods, including steel, dairy products, agricultural equipment, pulp and paper, and electronics.

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