OTTAWA — President Donald Trump has broadened the scope of his threat to restrict Canadian businesses from selling goods and services to the U.S. government, although his latest escalation in the trade war would not hit state-level or military procurement contracts.

“Canada has unreasonably imposed new barriers to United States companies seeking to access the Canadian government procurement market,” Trump wrote in a presidential memo issued late Wednesday afternoon. He cited Buy Canadian policies that the federal government, as well as Quebec, Ontario and B.C., rolled out last year to prioritize domestic suppliers, as justification for the move.

The president ordered Russell Vought, who leads the White House’s Office of Management and Budget, and U.S. Trade Representative Jamieson Greer to “identify and take all steps permitted by applicable law with respect to Canadian origin items in the federal civil procurement system that can, where warranted, be removed or made non-available for purchase.” The memo further tasked Vought with notifying U.S. departments and agencies about “domestic alternatives.” (The U.S. also has policies favouring domestic suppliers, including the Buy American Act of 1933.)

The choice to focus on civil procurement—implying an exemption for defence spending—is significant. An analysis of federal contract awards shows the U.S. government committed US$2.1 billion to goods and services of Canadian origin in fiscal 2025. About US$1.7 billion, which is more than 80 per cent of the total, was awarded by the U.S. Department of Defense, which Trump renamed the Department of War. Nearly US$1.3 billion was committed for bulk explosives, combat and tactical vehicles and military-grade ammunition from Canada.

The U.S. federal government also typically makes up a small share of American procurement contracts awarded to Canadian suppliers. A 2023 analysis by Export Development Canada, which relied on data from 2015, estimated that Canada was awarded about US$15 billion by all levels of U.S. government that year. The federal government accounted for US$624 million, meaning the bulk of it was awarded by state and local governments.

While it remains to be seen what Vought and Greer will ultimately recommend for removal, at first glance the memo goes much further than what Trump originally said he would do. In a post on his Truth Social platform last week, the president had targeted Canadian products on a list of pre-approved suppliers managed by the General Services Administration, the U.S. federal agency that oversees procurement. While Trump had said he was targeting US$50 billion worth of Canadian goods, there were just 50 companies with Canadian addresses on that list.

Even if only a limited number of companies are ultimately caught up in this new move, the Canadian Chamber of Commerce said the wait for more details can be damaging.

“Further restrictions to businesses, especially integrated ones between the U.S. and Canada, simply means more lost sales and greater uncertainty for Canadian suppliers and more costly or less reliable options for the U.S. It’s another unfortunate development with real impacts,” Alex Greco, senior director for manufacturing and value chains, said in a statement. “Businesses are still getting clarity on the scope, timing and treatment of existing contracts.”

A spokesperson for Canada-U.S. Trade Minister Dominic LeBlanc said in a statement that Ottawa had taken note of the memo updating the previous announcement on procurement. “As is always the case, we will review these measures with a focus on the best interest of Canadian businesses and workers,” Gabriel Brunet wrote Thursday.

Editor’s note: This story has been updated to include comment from the Canadian Chamber of Commerce.