US President Donald Trump has announced a 35% tariff on Canadian goods, effective 1 August, escalating tensions between Washington and Ottawa as both nations approach a self-imposed deadline to finalise a new trade agreement.
The announcement was made via a letter shared on Trump’s social media platform, Truth Social. It was one of more than 20 similar letters sent to US trade partners this week, many of which threatened further blanket tariffs of 15% or 20%. Trump also said new tariffs on the European Union would be unveiled soon.
Canadian Prime Minister Mark Carney, responding to the news, pledged his government would continue to defend Canadian interests, saying the government will continue to protect workers and businesses.
Canada currently enjoys an exemption for some exports under the North American free trade agreement, now known as the Canada-United States-Mexico Agreement (CUSMA). However, it remains unclear whether Trump’s latest tariff threat would apply to CUSMA-compliant goods.
A 25% global tariff already applies to Canadian steel, aluminium and automobile imports, and Trump has imposed a separate 50% tariff on copper imports, which will also take effect in August.
Canada, which sends around 75% of its exports to the US, is particularly vulnerable due to its heavy reliance on the auto and metals sectors.
Trump claimed in his letter that the new 35% tariff was a response to “Canada’s failure” to address several long-standing trade and security concerns. These included the country’s dairy tariffs, the US-Canada trade deficit, and what he called insufficient action against the flow of fentanyl into the United States.
“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 further added: “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.”
The fentanyl claim has drawn scrutiny. According to the US Customs and Border Protection, just 0.2% of all fentanyl seizures occur at the northern border with Canada; the vast majority come through the southern border with Mexico.
Carney responded on X by affirming Canada has made efforts to stop “the scourge of fentanyl” in North America, adding that Ottawa remained committed to working with Washington to “protect communities in both countries.”
Canada has stepped up border security this year and appointed a dedicated “fentanyl czar” following repeated US complaints.
At the G7 Summit in June, Carney and Trump committed to reaching a new deal by 21 July, but Trump’s latest action casts doubt on that goal.
The White House has warned that any Canadian retaliation could lead to even steeper duties. Trump’s letter stated that the 35% tariff was separate from existing sector-specific measures.
Canada has already responded with counter-tariffs and indicated it would escalate them if talks failed.
In a bid to reduce tensions, Carney in June rescinded a controversial digital services tax on major US technology firms, after Trump labelled it a “blatant attack” and threatened to derail trade negotiations.
Carney later acknowledged: “It was part of a bigger negotiation” aimed at resolving broader trade disputes.
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