Category: 2. World

US President Donald Trump has said he will impose a 35% tariff on Canadian goods starting on 1 August, even as the two countries were days away from a self-imposed deadline to reach a new trade deal.

The announcement came in the form of a letter published on Trump’s social media platform Truth Social, along with additional threats of blanket tariffs of 15% or 20% on most trade partners.

Canadian Prime Minister Mark Carney said his government would continue to protect Canadian workers and businesses as they worked towards the new deadline.

Trump has sent more than 20 such letters to other US partners this week. He says says he will soon announce new tariffs on the EU, too.

Like Canada’s letter, Trump has vowed to implement those tariffs by 1 August.

A blanket 25% tariff has already been imposed on some Canadian goods, with the nation also hit hard by Trump’s global steel, aluminium and auto tariffs – though there is a current exemption in place for goods that comply with a North American free trade agreement.

It is unclear if the latest tariffs threat would also apply to goods covered by the Canada-United States-Mexico Agreement (CUSMA).

Trump has also imposed a global 50% tariff on aluminium and steel imports, and a 25% tariff on all cars and trucks not built in the US.

He also recently announced a 50% tariff on copper imports, scheduled to take effect next month.

Canada sells about three-quarters of its goods to the US, and is an auto manufacturing hub and a major supplier of metals, making the US tariffs especially damaging to those sectors.

Trump’s letter said the 35% tariffs were separate to those sector-specific levies.

“As you are aware, there will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump stated.

He also tied the tariffs to what he called “Canada’s failure” to stop the flow of fentanyl into the US, as well as Canada’s existing levies on US dairy farmers and the trade deficit between the two countries.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter. These Tariffs may be modified, upward or downward, depending on our relationship with Your Country,” Trump said.

President Trump has previously accused Canada – alongside Mexico – of allowing “vast numbers of people to come in and fentanyl to come in” to the US.

In his response on X, Carney said Canada had made essential progress to “stop the scourge of fentanyl” in North America, and that his government was committed to continuing to work alongside the US to protect communities in both countries.

According to data from the US Customs and Border Patrol, only about 0.2% of all seizures of fentanyl entering the US are made at the Canadian border. Almost all of the rest is confiscated at the US border with Mexico.

Earlier this year, Canada also announced more funding towards border security and had appointed a fentanyl czar in response to Trump’s complaints.

Canada has been engaged in intense talks with the US in recent months to reach a new trade and security deal.

At the G7 Summit in June, Carney and Trump said they were committed to reaching a new deal within 30 days, setting a deadline of 21 July.

Trump threatened in the letter to increase levies on Canada if it retaliated. Canada has already imposed counter-tariffs on the US, and has vowed more if they failed to reach a deal by the deadline.

In late June, Carney removed a tax on big US technology firms after Trump labelled it a “blatant attack” and threatened to call off trade talks.

Carney said the tax was dropped as “part of a bigger negotiation” on trade between the two countries.

CNN
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President Donald Trump late Thursday threatened a 35% tariff on goods imported from Canada, a dramatic escalation in an on-again, off-again trade war with America’s northern neighbor and one of its most important trading partners.

And, in a separate NBC News interview, he suggested blanket tariffs on other US trading partners will jump, as well.

The Thursday actions are the latest examples of a whipsaw policy that’s left investors, trading partners, businesses and everyday Americans alike scrambling to make plans even as the economic ground shifts not just from week to week but in some cases from hour to hour.

It wasn’t immediately clear if the new tariffs, set to take effect August 1, would apply to all Canadian goods or if Trump’s threat applied only to the limited number of goods on which the United States currently levies tariffs.

“Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” Prime Minister Mark Carney said in a statement to X.

“We will continue to do so as we work towards the revised deadline of August 1.”

Trump’s announcement of higher tariffs on Canada comes amid a flurry of letters Trump has sent to world leaders over the past week informing them what rates their goods will be tariffed at come August 1, absent any trade deals. Trump has sent nearly two dozen such letters.

But Canada is by far the largest trading partner with the United States to receive a letter from Trump this week. Canada and the US have been in trade talks with the hopes of reaching a deal by July 21.

NBC News also reported Thursday that Trump told “Meet the Press” moderator Kristen Welker that the remaining US trading partners that have not yet received trade letters or reached framework agreements will be charged a blanket tariff rate. The United States currently imposes a 10% tariff on nearly all foreign goods coming into the country, but Trump on Thursday said he might double that.

“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump said, according to NBC News.

Canada is the top buyer of US exported goods, importing $349 billion worth last year, according to Department of Commerce data. Tariffing Canadian goods could, therefore, backfire if additional retaliatory tariffs are put in place on American goods. (Trump threatened to respond to any such tariffs by raising rates on Canadian goods.)

Meanwhile, Canada shipped $413 billion worth of goods to the US last year, the third-highest source of foreign goods.

Back and forth tariffs

But Canada has been the subject of Trump’s scorn since before he took office. In November 2024, just a few weeks after the election, Trump pledged 25% tariffs on all products from Canada and Mexico on his first day in office “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

A day before those tariffs were set to go into effect in February, Trump paused them for 30 days. They went into effect March 6, but Trump exempted goods that were compliant with the US-Mexico-Canada agreement that he negotiated and signed during his first term in office. That significantly blunted the impact of the tariffs on Canada and Mexico.

On March 7, Trump threatened new tariffs on Canadian lumber and dairy products.

“Canada has been ripping us off for years on lumber and on dairy products,” Trump said in an Oval Office address that day, citing Canada’s roughly 250% tariff on US dairy exports to the country. Trump said America would match those tariffs dollar-for-dollar. But the tariffs were never implemented.

Last month Trump – once again – threatened to hike taxes on Canadian goods over a retroactive digital services tax that was set to take effect, which would have fallen heavily on American tech companies that did business in Canada. In the 11th hour, Canada indefinitely postponed the tax in an effort to continue trade talks and avoid higher tariffs.

And, throughout, he has often waxed poetic about his desire to see Canada become the 51st state – a proposition Canada has vehemently, and repeatedly, rejected.

The sectoral tariffs Trump imposed include 50% taxes across all imported steel and aluminum and 25% tariffs on most cars and car parts – some of Canada’s main exports to the US. The tariffs have been charged on Canadian shipments that do not comply with the USMCA, a previous trade agreement.

In response to those auto tariffs, Canada levied a 25% tariff on US-made vehicles that aren’t compliant with USMCA. Canada also retaliated against Trump’s steel and aluminum tariffs by rolling out a tariffs on billions of dollars worth of US goods, including whiskey, sporting gear and household appliances.

In Thursday’s letter, Trump mentioned the fentanyl issue, one of his original reasons for tariffing America’s northern neighbor. However, according to US federal statistics, Canada is responsible for a minuscule percentage of illegal fentanyl coming into the US. Of the 21,889 pounds of fentanyl US border authorities seized in the 2024 fiscal year, just 43 pounds – about 0.2% – were seized at the Canadian border.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter. These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” Trump said in the letter.

Late on Thursday night, Carney responded by saying that Canada had 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.”

In February, Carney’s predecessor Justin Trudeau appointed a Fentanyl Czar and launched a new border plan aimed at intercepting fentanyl and other narcotics arriving and leaving Canada.

Pierre Poilievre, Canada’s Conservative opposition leader, called the tariffs “another unjustified attack on Canada’s economy.”

“Canada has long been a reliable partner and trusted friend to the United States. These tariffs will damage both our countries,” Poilievre wrote on X.

This story has been updated with additional context and developments.