President Trump has threatened to bar Bombardier from the U.S. market and to strip Canadian goods from government contract lists, hours after Canada's retaliatory tariffs on $20 billion of American goods took effect. The move marks a fresh escalation in the U.S.-Canada trade dispute, with analysts warning of further tariff action ahead.
Trump threatens to ban Bombardier
Shares in Bombardier lost altitude on Tuesday after President Trump threatened to ban the Canadian aircraft manufacturer from the U.S. market unless it commits to building more in the United States. The company's U.S.-listed shares dropped more than 2%, while its Toronto-listed stock fell as much as 8% before paring losses.
Trump made the threat in a social-media post on Monday, just hours before new Canadian tariffs on $20 billion worth of American goods took effect. Those tariffs were Canada's previously announced response to Trump's own 50% tariffs on $20 billion of Canadian imports imposed last month. According to RBC Capital Markets analysts, the move could "create near-term uncertainty around U.S. customer commitments" for Bombardier.
Government contracts and Section 338 next
The president then raised the stakes further, ordering Canadian goods removed from U.S. government contract lists unless Canada restores what he called full reciprocity for American farmers and companies. He is relying on Section 338 of the Tariff Act of 1930, after the Supreme Court in February rejected his prior use of emergency powers legislation to justify tariffs.
TD Cowen's Chris Krueger said the administration could expand Section 338 measures, which so far cover about 5% of Canadian imports, or lean on Section 232 of the Trade Expansion Act to double auto tariffs to 50% by January. Canada's alcohol and dairy sectors look most exposed, he added.
Boycott risk on both sides
Capital Alpha Partners analysts described Trump's Bombardier threat as effectively a call for a U.S. boycott, warning that such moves could invite reciprocal boycotts elsewhere. The dispute leaves both governments room to escalate further before any off-ramp emerges.
Source: MarketWatch
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