Trump Threatens 35% Tariffs on Canadian Goods

Trade Tensions Escalate as Deadline Looms

Amid ongoing trade negotiations, **President Trump** has declared his intent to impose a 35% tariff on Canadian goods, starting August 1. This move intensifies pressure as the two nations approach a critical deadline for reaching a new trade agreement.

New Levies Announced

**Trump** announced the impending tariffs in a letter addressed to Prime Minister **Mark Carney**, shared on social media. The U.S. already applies a 25% tariff on specific Canadian products, contributing to economic strain from existing steel, aluminum, and auto tariffs.

The letter to **Carney** is one of over 20 sent to trade allies this week, including those addressed to Japan, South Korea and Sri Lanka. According to the letters, **Trump** intends to put the tariffs in place for these trade partners by August 1.

Broader Trade Actions

Beyond Canada, **Trump** suggested broader tariffs of 15% to 20% affecting most trade partners and said he intends to notify the European Union about upcoming tariff rates on their goods. The U.S. currently imposes a 25% tariff on all Canadian imports, but goods that comply with the North American Free Trade Agreement are exempt.

Other tariffs previously implemented by **Trump** include a 50% global tariff on aluminum and steel imports, plus a 25% tariff on cars and trucks manufactured outside the U.S. Copper imports are also facing a 50% tariff set to begin next month.

Economic Impact on Canada

Canada, which sends approximately three-quarters of its exports to the U.S., is particularly vulnerable given its auto manufacturing sector and status as a major metals supplier. These tariffs could be especially damaging to these key industries.

According to **Trump**’s letter, these new tariffs would be separate from the sector-specific levies already in place. “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.

Fentanyl and Trade Deficit Cited

**Trump** linked the tariffs to what he described as “Canada’s failure” to curb fentanyl flow into the U.S., existing Canadian levies on U.S. dairy farmers, and the trade imbalance 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 accused both Canada and Mexico of enabling the entry of fentanyl and undocumented immigrants into the U.S. However, U.S. Customs and Border Patrol data indicates that only about 0.2% of fentanyl seizures occur at the Canadian border; the vast majority are at the Mexican border.

As a response to **Trump**’s previous concerns, Canada has increased funding for border security and created a “fentanyl czar” earlier in the year. The country has also been in intensive talks with the U.S. to forge a new trade and security agreement.

Strained Negotiations

At the G7 Summit in June, Prime Minister **Carney** and **Trump** pledged to secure a new trade deal within 30 days, setting a target of July 21. According to the Office of the United States Trade Representative, trade between the U.S. and Canada totaled $798.3 billion in 2022, making it the second-largest trade relationship for the U.S. U.S. Trade with Canada.

**Trump** warned of increased levies if Canada retaliates. Canada has already implemented counter-tariffs on the U.S. and promised additional measures if a deal isn’t reached by the deadline. In late June, **Carney** eliminated a tax on large U.S. tech companies after **Trump** called it a “blatant attack” and threatened to halt trade discussions.

**Carney** stated that the tax was removed as “part of a bigger negotiation” concerning trade. The Prime Minister’s office has not yet commented on **Trump**’s letter.