The US imposes an import ban on some Canadian products. Which individual US stocks are affected?

The Zhitong Finance App learned that on Tuesday, the US imposed comprehensive import restrictions on Canadian alcoholic beverages, motorcycles and dairy products, exacerbating an already intense trade dispute between the two countries. These import bans will take effect on September 29 and will be announced on the White House website. Previously, retaliatory tariffs imposed by Canada on US goods came into effect on Tuesday.

Canadian Prime Minister Carney said in a video posted online on Tuesday: “We have everything we need to transform and grow. Transformation comes at a cost. There is a cost to any action, but that is insignificant compared to the cost of stagnation.”

The US ban appears to cover most alcoholic beverages, including beer, various wines, whiskey, bourbon, rum, vodka, vermouth, tequila, mezcal, and brandy. According to an announcement on the White House website, the dairy ban covers whey protein, inverted molasses, sugar cane molasses, and non-alcoholic beer.

In addition to the import ban, some cheese products are also included in a list and face a 50% tariff rather than a direct import ban. The list also includes certain products such as paper, aluminum, wood, furniture, lighting, and others.

A US official said that President Trump's previous plan to raise Canadian car tariffs from 25% to 50% on January 1 is still in effect. According to reports, the official added that US Trade Representative Jamison Greer spoke with Canada's minister responsible for bilateral trade between the US and Canada, Dominique LeBlanc in the past few days, and the two sides are expected to call again in the next few days to discuss whether there are other solutions between the two countries.

On Tuesday, a few hours before the latest import ban came into effect, Trump directed the US General Services Administration (the US government agency responsible for providing services to the federal government) to coordinate with the US Trade Representative to “remove products originating in Canada from the General Services Administration's various incentive programs unless Canada resumes full fair and reciprocal benefits to American farmers and companies.”

Stocks to focus on

The US ban on most Canadian alcoholic beverages may benefit US beverage companies, as it will free up more shelf space for local brands, and may also make these companies' stocks one of the stocks most sensitive to escalating trade frictions. Investors can watch for potential growth in demand for beer, wine, and spirits from companies listed in the US, such as Constellation Brands (STZ.US), Moku Liquors (TAP.US), and Baifumen-B (BF.B.US). Diageo (DEO.US) may also benefit indirectly from reduced competition in Canada.

At the same time, companies operating in the US dairy and food ingredients market may benefit if buyers turn to domestic US suppliers. On the other hand, Saputo's Canadian business is likely to face pressure as it produces whey protein and other dairy ingredients affected by restrictions. Kraft Heinz (KHC.US) is also somewhat dependent on Canadian whey imports.

Trade measures have also brought automobile and aluminum stocks into focus. Ford (F.US), General Motors (GM.US), and Stellantis (STLA.US) are all affected by the cross-border automotive supply chain, while American Aluminum (AA.US) and Rio Tinto (RIO.US) may be affected by changes in Canadian aluminum exports.