New US tariffs on about $1 billion worth of Canadian imports took effect Wednesday, hitting products that range from motorcycles to alcohol as the trade fight between the two longtime allies widened.
The duties target a list of Canadian goods that US officials say will pressure Ottawa to change course on policies Washington calls unfair. Canadian officials have rejected that characterization and vowed to respond.
The tariffs mark a sharp turn for two economies that trade more than $900 billion in goods and services a year. Canada is one of the largest US trading partners, and the two countries share supply chains in autos, energy and agriculture.
Motorcycles sit among the most visible items caught in the crossfire. The US motorcycle industry has pushed for relief from Canadian tariffs it says have hurt sales, according to industry trade groups. Alcohol is also on the list, raising costs for importers and, eventually, consumers.
Canadian officials said the move would raise prices on both sides of the border and warned of retaliation. "We will not back down," a Canadian government spokesperson said, according to statements reported by Canadian media. The spokesperson said Ottawa is reviewing options for counter-tariffs.
The dispute traces back to disagreements over trade policy that have simmered for months. Washington has argued that Canadian measures disadvantage US manufacturers. Ottawa counters that its rules are consistent with existing trade agreements.
Economists say the tariffs are small relative to total US-Canada trade, but the symbolic weight is larger. Tariffs on consumer goods like liquor and motorcycles are easy for the public to see, which raises the political stakes.
Importers face new paperwork and higher costs starting immediately. Retail groups warn that some price increases could show up within weeks, depending on inventories.
The two countries remain bound by the US-Mexico-Canada Agreement, which governs most of their trade. That pact includes dispute resolution mechanisms that either side could invoke, though such cases often take months or years to resolve.
Business groups on both sides called for talks. The US Chamber of Commerce has urged negotiators to return to the table, warning that tit-for-tat tariffs hurt workers and companies in both countries.
It is unclear whether the tariffs will push either side toward a deal or trigger a broader exchange of penalties. For now, the duties are in force, and the goods on the list are getting more expensive to move across the border.
