USA-CAN Trade War: Tariffs to "offset Canadian discrimination"

September 17, 2026

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Written by Daphne Feng

Hi, I'm interrupting the regularly scheduled post to comment on the US-Canada trade war. I set out to write a satirical article about it being easier to get Canadian wines by going to Cuba (this isn't actually true), but as I dug into the research, the headlines started to confuse me. I spent some time harvesting statistics, letting them ferment in the stainless-steel furor of my brain. Then I blended the new information with other sources.This is the result. All $ in US dollars.

I’d love to hear your “non-trolling” comments below.

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The Trump administration escalated its trade war against Canada earlier this month. If nothing changes by Sep 29, 2026, there will be a ban on certain Canadian alcohol products (and dairy and motorcycles).

Is Canada a good trading partner?

Of course, they’re f*cking Canadian.

But since we are here, the trade relationship between the US and Canada is the second largest in the world. According to the US Bureau of Economic Analysis, last year almost a trillion dollars of goods and services crossed the border. What's more, the trade deals are heavily cross-integrated—Canada primarily exports raw energy (heavy crude oil) southwards, and the US exports value-added industrial machinery, finished vehicles, electronics, and refined fuels back north.

Canada is and has been the single largest supplier of crude oil to the US for more than twenty years, especially since Canadian heavy crude travels almost entirely via dedicated land-based pipelines (Keystone, Enbridge, Trans Mountain). For the past five years, it has represented 60% or more of all US crude oil imports. Amid the ongoing Russia-Ukraine war and the Iran war, the US has continued to rely heavily on Canadian crude.

I feel it is important to say that the US is a net exporter of crude oil and domestically produces twice as much as it imports.

Why the vitriol against one of the US’s oldest and most loyal trading partners?

The US trade deficit with Canada is largely driven by massive energy imports. Because Washington cannot easily cut back on Canadian oil, the trade-war battlefield has instead moved toward Canadian manufacturing, agriculture, and consumer goods. In other words, this trade war escalation cannot be about energy, so the battlefield has to be somewhere else. Or to put it another way, alcohol, dairy, and motorcycles are collateral damage.

The mandatory sixth-year joint review of the US–Mexico–Canada Agreement (USMCA) began on July 1, 2026. This milestone triggered a period of ongoing renegotiations after the United States declined to extend the agreement for another 16 years.

US policymakers frequently target Canada's protected domestic sectors—most notably Canada's dairy market and provincial liquor boards—demanding full market access for American exporters.

This is a wine blog. When do we get back to Sunlight into Wine?

Let’s be real, no one, except us, gives a shit about alcohol, much less wine. President Donald Trump is famously a teetotaler, so I don’t think he actually has angst against this industry. The Canadian wine industry is only 0.14% of the country's gross domestic product and the value of (finished) wine exported to the US was $13.5M in 2024. Small potatoes. The vast majority of that value is from Ontario and over half is yummy icewine. For makers of high quality, dry wines from British Columbia, like the Okanagan and Similkameen Valleys, these account for less than $1M of exports.

So this ban’s effect on the Canadian wine industry isn’t even a drop in the bucket in a place like the Okanagan. It’s a yawning non-event. Most of these bottles stay in country for domestic distribution and consumption. However, for US wine aficionados, it is sad to see even this small beginning of an import market for these very fine and special wines come to an end.

What about the Americans?

Remember the title of this article—the trade war to “offset Canadian discrimination?” Ahead of his January 2025 inauguration, Donald Trump started trash talking the Canadians on Truth Social, remarking how “Many people in Canada LOVE being the 51st State.” It turns out the Canadians did not like this.

It was the beginning of a situation which crescendoed when President Trump invoked the International Emergency Economic Powers Act to increase tariffs on nearly all countries. When a 25% tariff was enacted on (non-USMCA eligible) Canadian imports in March 2025, Canadian provincial premiers leveraged their locally controlled liquor systems (such as the LCBO in Ontario, the SAQ in Quebec, and the BCLDB in British Columbia) as immediate economic leverage and shut out US beverage companies, wineries, and distilleries.

Is the Canadian wine consumer like a Canadian girlfriend?

Canadian wine consumers are real—and they are big fans of US wines. In 2024, Canada accounted for 36% of all U.S. wine exports, worth $460M. After the trade shenanigans started in 2025, the value of wine exported to Canada shrank by $357M or 78%. Note: California wine accounts for roughly 80% to 85% of the total volume exported, the rest is largely from the Pacific Northwest.

The result? Canada will likely lose some portion of the $13.5M of wine exported to the US, while American wineries, mostly California, Oregon, and Washington, have already lost $357M in wine exports to Canada. And, if you're an American wine drinker who wants Canadian wine, apparently the trade war has created a bizarre incentive to look somewhere other than the United States, maybe Cuba?