Alcohol Bans, ‘Buy Canadian’ Policy Designated as Trade Irritants by US Report

The United States has flagged provincial bans on American alcohol products and Ottawa’s “Buy Canadian” policy in a new report citing several trade irritants between the two countries.

The 2026 National Trade Estimate Report on Foreign Trade Barriers said market access bans put in place by provincial liquor control boards “greatly hamper” exports of American wine, beer, and spirits to Canada.

Those bans were implemented by every province and territory in early 2025 in response to U.S. President Donald Trump imposing tariffs on Canadian goods. Provincial liquor control boards removed American alcohol products from store shelves last winter and, while some provinces have resumed the sale of U.S. alcohol, others, like Ontario, have not.

The annual document prepared by the Office of the United States Trade Representative said only Alberta and Saskatchewan were allowing sales of U.S. liquor as of Dec. 31, 2025.

All other provincial and territorial liquor control boards have ceased distributing American alcohol beverages to retailers, restaurants, and other businesses, and ceased purchasing the beverages for sale in liquor control board stores, according to the report released on March 31.

“The United States continues to raise serious concerns regarding these actions and to press Canada to ensure that U.S. alcohol beverages immediately and permanently return to all provincial and territorial markets,” the report said.

It also expressed concern about the federal government’s “Buy Canadian” procurement policy that prioritizes using Canadian-produced steel, aluminum, and wood products in large federal construction and defence projects. It also criticized the policy’s focus on awarding contracts worth $25 million or more to Canadian companies.

American firms have reported concerns about restrictions and more stringent measures when competing for contracts, the report said. Some of these issues include being forced to prove their Canadian subsidiary’s independence from a U.S. parent company or having to share information about their boards of directors.

The report also singled out Ontario, Quebec, and British Columbia for implementing policies that “discriminate against” or exclude U.S. businesses from tenders.

“These policies and regulations range from price penalties on bids from U.S. businesses to complete prohibitions on procurement from U.S. suppliers,” the document said.

Supply Management and Other ‘Irritants’

Canada’s supply management system for dairy, eggs, and poultry products was also listed as a trade irritant in the report.

Supply management in Canada operates on a national scale but is implemented at the provincial level. Each province’s marketing board manages its share of the national quota for dairy, poultry, and eggs.

Under the current system, American imports that exceed set quotas “are subject to prohibitively high tariffs,” the report said, citing a 245 percent tariff for cheese and 298 percent for butter.

The office of the U.S. Trade Representative also accused Ottawa of failing to offer the market access benefits that it committed to under the United States-Mexico-Canada Agreement (USMCA) and said it remains on high alert for any “potential Canadian actions that would further limit U.S. dairy exports to Canada.”

Other issues listed in the report include delays with aircraft validation in Canada, the country’s zero plastic waste agenda, and restrictions on U.S. seeds exports.

Canada was the second-largest U.S. goods export market last year despite a dip in goods coming into the country, the report said. A total of  $336.5 billion in American products were exported to Canada last year, down nearly 4 percent from 2024.

The Epoch Times contacted the Prime Minister’s Office for comment on the report but did not immediately hear back.

Trade

Trade talks with Canada ahead of the mandatory review of the continental trade pact are lagging behind those with Mexico, U.S. Trade Representative Jamieson Greer said last month.

Greer told Fox Business in a Feb. 10 interview that Mexico is being “quite pragmatic” in ongoing USMCA negotiations, but Canada has been “more challenging” to deal with.

The USMCA was negotiated during the first Trump administration to replace the North American Free Trade Agreement. It has shielded Canada and Mexico from the worst impacts of Trump’s tariffs because his global 10 percent duty does not apply to goods that comply with the trade agreement.

Canada is heavily impacted, however, by Trump’s sectoral tariffs on industries like steel, aluminum, autos, lumber, and cabinetry.

The White House launched investigations last month under Section 301 of the Trade Act of 1974 against 60 countries, including Canada, citing concerns that these markets have failed to ban the importation of goods produced with forced labour.

Canada has regulations against forced labour in supply chains, but the U.S. alleges that it does not properly enforce them.

This means “goods made with forced labor may be able to enter and compete in Canada’s market,” the report on foreign trade barriers said. “This issue may artificially suppress costs, including labor costs, which may give certain goods from and within Canada an unfair advantage.”

The U.S. investigations, which began on March 12, are seen as part of a broader strategy by Trump’s administration to replace tariffs that were struck down by the U.S. Supreme Court on Feb. 20.

They also coincide with the mandatory review of the USMCA by the U.S., Mexico, and Canada, which is scheduled to begin on July 1, the sixth anniversary of the trade deal.

Trump has called the USMCA “irrelevant” and has said it may have served its purpose, leaving the future of the continental trade agreement in doubt.

Greer also has floated the idea of abandoning the trade pact in favour of two separate bilateral agreements with Canada and Mexico.

These comments have been met with skepticism by Canada-U.S. Trade Minister Dominic LeBlanc. He said separate deals have not come up during his discussions with the Trump administration.

In the meantime, Canada has been pursuing closer ties with Mexico. LeBlanc led a large trade mission to the country in February and met with Mexican President Claudia Sheinbaum.

He said Canada and Mexico are aligned on wanting to review the USMCA, not renegotiate it.

The USMCA will result in one of four outcomes: a renewal with the potential to extend the deal to 2052, a partial renegotiation, a period of prolonged uncertainty with annual reviews until 2036 when the current pact expires, or termination.

The third option would mean Canada, the United States, and Mexico were unable to agree to a 16-year renewal, requiring them to hold joint annual reviews until they either agree to approve an extension or the pact expires 10 years from now.

The fourth scenario, a complete withdrawal, could also occur. Any country can withdraw with six months’ written notice, effectively terminating the pact, although that could come with legal ramifications.

The Canadian Press contributed to this report.