Canada Provinces OK Canada-Wide DtC Alcohol Shipping Agreement

Just a day after President Trump announced he was slapping a 50% tariff on many Canadian goods as retaliation for some Canadian provinces refusing to sell American distilled spirits, wine and beer, Canada's nine premiers anoun ced provincial rules will be changed to allow bev//al suppliers to sell alcohol directly to consumers regardless of jurisdiction.

“Canadians can get the benefits of these products, strengthening internal trade — being our own best customer at a time when it really matters,” New Brunswick Premier Susan Holt told reporters in Charlottetown, where premiers are meeting this week.

Meanwhile, Canadian analysts said Trump's latest escalation of his tariff campaign against Canadian is narrowly focused and appears to be intended to give the U.S. more leverage in future trade talks.

The 50% tariff covers a range of goods including honey, liquor, cement and hockey sticks. Also, important, Thump's latest action removes exemptions for goods compliant with the Canada-U.S.-Mexico Agreement on trade (CUSMA), which has shielded Canadian exporters in the past.

Removing that exemption represents a “marked escalation” in U.S. trade aggression, said Royce Mendes, head of macro strategy at Desjardins, the largest association of credit unions in North America. “That being said, when you look at what’s being covered … it’s certainly not broad-based in nature. It’s more targeted,” he said.

Mendes and a number of other Canadian economists believe the new duties will affect about 5% of Canada's exports to the U.S. BMO senior economist Robert Kavcic said in a note to clients that the proposed tariffs would cover roughly $28-billion worth of annual Canadian exports to the United States. That amounts to 0.8 per cent of Canada’s gross domestic product, he said.

After speaking with Trump Tuesday morning, Prime Minissteer Mark Carney said he and Trump had agreed to intensify talks in the coming weeks.

U.S. International Trade Representative Jameson Greer said, “Sometimes you take an action that leads to a better negotiation in the end. We will see where it leads.”