Washington, D.C. — President Donald Trump has threatened to impose a 35% tariff on Canadian goods starting August 1, escalating trade tensions between the U.S. and its northern neighbor just days ahead of a key negotiation deadline.
Trump made the announcement in a public letter posted on his Truth Social platform. He also hinted at similar penalties for other trading partners, including the European Union, as part of a broader trade overhaul.
“There will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump wrote. He tied the planned tariffs to three issues: the U.S.-Canada trade deficit, Canadian dairy policies, and what he called “Canada’s failure” to prevent fentanyl from entering the United States.
“If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump added. “These Tariffs may be modified, upward or downward, depending on our relationship.”
The White House has sent similar letters to over 20 U.S. trade partners in recent days, warning of new duties ranging from 15% to 25% on imports. The 35% tariff on Canadian goods would be separate from previously announced levies on autos, steel, aluminum, and copper.
It remains unclear whether the threatened tariffs would apply to goods already protected under the Canada-United States-Mexico Agreement (CUSMA), the North American trade pact signed in 2020. Canadian exports to the U.S. account for roughly 75% of the country’s total trade, with the automotive and metals sectors particularly exposed.
Canadian Prime Minister Mark Carney responded swiftly on X, saying his government would protect Canadian businesses and jobs and continue working toward a fair deal with the U.S.
“Canada has made significant progress to stop the scourge of fentanyl in North America,” Carney stated. “We remain committed to working with the U.S. to safeguard our communities.”
Carney also pushed back against Trump’s accusations, pointing to U.S. Customs and Border Protection data showing that less than 0.2% of fentanyl seizures in the U.S. occur at the Canadian border. Most fentanyl enters the country through the southern border with Mexico.
Earlier this year, Canada appointed a national coordinator for fentanyl control and increased funding for border enforcement in response to U.S. concerns.
The tariff threat comes as both nations approach a July 21 deadline to finalize a new bilateral trade and security deal. At the G7 Summit in Alberta last month, Trump and Carney pledged to complete talks within 30 days.
Canada has already retaliated with limited counter-tariffs and has promised more if an agreement isn’t reached. In late June, Carney removed a controversial digital services tax targeting large U.S. tech firms after Trump called it a “blatant attack” and threatened to end talks altogether.
Carney said the rollback was part of a “larger negotiation” to restore stable trade relations with the U.S.
Canada, a leading exporter of cars, metals, and agricultural goods, relies heavily on access to U.S. markets. The threat of new tariffs has sparked concern among Canadian manufacturers and cross-border suppliers already grappling with past restrictions under Trump’s global trade policies.
Under current policy, Canada faces a 25% tariff on some metals and a 50% duty on copper imports. Trump’s administration has also imposed a 25% tariff on all vehicles not assembled in the U.S., further pressuring Canadian automakers.
Whether the looming tariffs will be enforced or withdrawn remains dependent on the outcome of ongoing negotiations. For now, the clock is ticking toward an August 1 showdown.
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