Trump bars Canadian goods from U.S. government contracts

President Donald Trump on Tuesday directed the General Services Administration to work with the U.S. Trade Representative to remove all Canadian-origin products from federal government procurement lists, a move that would bar Canadian goods from U.S. agency contracts and deepen an already volatile trade conflict between the two countries.

The announcement came hours after Canada's retaliatory tariffs on approximately $20 billion worth of American goods took effect just after midnight on Tuesday.lethbridgeherald+2

A Trade War Intensifies

"The Canadian Government, including Canadian Provinces, have banned American Small Businesses and Companies from selling into their Government Procurement Markets," Trump said in a post announcing the directive.money.usnews+1

The procurement ban represents yet another front in an 18-month trade war that has rattled North American commerce. Canada's counter-tariffs, which impose duties of 15%, 25%, and 50% on U.S. products ranging from steel and dairy to clothing and electronics, were a dollar-for-dollar response to U.S. tariffs enacted last month on $20 billion worth of Canadian exports.ghy+1

The Trump administration's tariffs, imposed under a Depression-era U.S. law, targeted Canadian wine, furniture, dairy products, cement, clothing, fishing rods, and hockey equipment, according to Reuters Thomson Reuters Corporation ↘ 1.85%. Those tariffs do not allow Ottawa to exercise exemptions under the United States-Mexico-Canada Agreement.reuters

No Talks in Sight

The escalation follows the collapse of trade negotiations between the two countries last month. Canadian Prime Minister Mark Carney withdrew negotiators from Washington and announced the retaliatory tariffs, a move backed by a majority of Canadians, according to the New York Times. A Canadian government source told Reuters that there are currently no talks between the two sides among ministers or government officials.nytimes+1

Trump had already threatened last month to raise U.S. tariffs on all Canadian-made cars, trucks, and automotive parts to 50% starting January 1, and signed an executive order renaming Lake Ontario as Lake America. On Monday, Trump said Canadian aerospace company Bombardier could no longer sell in the United States unless it begins manufacturing there, according to CNBC.reuters+1

With no negotiations underway and both sides adding new retaliatory measures, the trade dispute shows no signs of easing.