U.S. President Donald Trump intensified his tariff campaign against Canada on Thursday, announcing that the U.S. would impose a 35 percent tariff on imports starting next month. He also indicated plans to implement blanket tariffs of 15 percent or 20 percent on most other trading partners.
In a letter shared on his social media platform, Trump informed Canadian Prime Minister Mark Carney that the new tariff rate would take effect on August 1 and would increase if Canada retaliated.
In a post on X late Thursday, Carney stated that his government would continue to defend Canadian workers and businesses as they navigate negotiations with the U.S. ahead of the deadline. The 35 percent tariff marks an increase from the current 25 percent rate imposed by Trump on Canada, representing a setback for Carney, who was aiming to finalize a trade agreement with Washington.
10 percent tariffs on energy and fertilizer not set to change
An exemption for goods covered by the United States-Mexico-Canada Agreement (USMCA) was expected to remain in place, and 10 percent tariffs on energy and fertilizer were also not slated to change, although Trump had yet to make a final determination on these matters, according to an administration official.
In his letter, Trump expressed concerns about what he termed the flow of fentanyl from Canada, as well as the country’s tariff and non-tariff trade barriers that adversely affect U.S. dairy farmers and others. He described the trade deficit as a threat to both the U.S. economy and national security. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote.
Canadian officials have stated that a minimal amount of fentanyl originates from Canada, but they have implemented measures to enhance border security. “Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries,” Carney added in his X post late Tuesday.
Read more: Trump announces 50 percent tariff on copper starting August 1, prices soar
New economic and security deal agreed within 30 days
The prime minister mentioned last month that he and Trump had agreed to finalize a new economic and security deal within 30 days. Trump has recently expanded his trade war, introducing new tariffs on several countries, including allies Japan and South Korea, as well as a 50 percent tariff on copper.
His latest move unsettled investors, causing U.S. and European stock futures to dip in Asia on Friday as markets anxiously awaited news on what tariff Trump would impose on the European Union later that day. Canada ranks as the second-largest U.S. trading partner after Mexico and is the largest buyer of U.S. exports. It purchased $349.4 billion of U.S. goods last year and exported $412.7 billion to the U.S., according to data from the U.S. Census Bureau.
Canada sells approximately three-quarters of its goods to the U.S. and is a hub for auto manufacturing as well as a major supplier of metals, making the U.S. tariffs particularly damaging to these sectors.Â
At the G7 Summit in June, Carney and Trump expressed their commitment to achieving a new deal within 30 days, setting a deadline of July 21.
In late June, Carney rescinded a tax on large U.S. technology firms after Trump labeled it a “blatant attack” and threatened to halt trade negotiations.
