Tensions between the U.S. and Canada have escalated after Trump threatens Canadian goods tariff of 35% starting August 1. The warning came Thursday in a letter addressed to Prime Minister Mark Carney, which the U.S. president posted on his Truth Social platform.
Trump wrote that the tariffs would not apply if Canadian firms moved manufacturing to the U.S. However, he warned that any retaliation by Canada would trigger even higher tariffs. The announcement comes as the two nations race to finalize a trade deal by the newly revised July 21 deadline.
Carney responded by saying Canada remains committed to defending its workers and businesses. He also emphasized that the country is strengthening global trade partnerships and won’t back down. According to his office, the prime minister had received the letter and continues negotiations in good faith.
In his message, Trump once again blamed Canada for allowing fentanyl to enter the U.S., despite official data showing the drug’s primary source remains the southern border. This talking point has been central to Trump’s policy since his re-election in November. After returning to office, he began imposing tariffs tied to his border and drug policy agenda.
Carney countered that Canada had made “vital progress” in curbing fentanyl exports and would continue working with the U.S. to protect both nations. Ottawa has already allocated $1.3 billion to enhance border security and appointed a national fentanyl czar earlier this year.
The proposed 35% tariff would escalate existing measures. Currently, the U.S. levies a 25% duty on non-CUSMA compliant goods from Canada and a 10% rate on key sectors like energy and potash. These have already strained Canadian industries such as steel, aluminum, and automotive manufacturing, triggering job losses and a drop in exports.
Meanwhile, Trump is threatening even more. His letter also mentioned a potential 50% tariff on Canadian copper imports. Last year, Canada exported $9.3 billion worth of copper and related products—over half of that went to the U.S. With China and Japan trailing far behind, such a tariff could have major consequences for Canada’s mining sector.
Trump also targeted Canada’s supply management system, which governs dairy, poultry, and eggs. His previous disputes with Canadian agricultural policies resurfaced as another justification for the trade threats. These points of tension are complicating the ongoing negotiations.
Foreign Affairs Minister Anita Anand said Thursday that Canada remains hopeful an agreement can still be reached before the deadline. Speaking from Malaysia at the ASEAN summit, she emphasized the importance of the negotiations for Canada’s economic future.
“This is an effort that we are putting all our weight behind,” she said. “It is necessary for the health of our economy.”
Political responses to Trump’s threats have been swift. Conservative Leader Pierre Poilievre called the move “unjustified” and urged all parties to unite in defense of the Canadian economy. Unifor president Lara Payne, representing over 300,000 workers, labeled the threat “extortion” and called for a strong government response.
The aggressive stance comes just one week after the Liberal government withdrew its digital services tax under pressure from Washington. Trump had demanded its removal and halted trade negotiations until the tax was pulled.
This latest letter was not unique. In the last 48 hours, Trump has sent similar tariff threats to Brazil, the Philippines, Moldova, Algeria, Libya, Iraq, Brunei, and Sri Lanka. Critics argue this “maximalist” approach to diplomacy reflects a broader return to aggressive trade tactics.
As negotiations continue, businesses on both sides of the border remain anxious. While some hope a deal can be salvaged, Trump’s threats leave little room for compromise. With the clock ticking, the question remains whether diplomacy can prevail—or whether a new trade war is on the horizon.
READ: Trump’s “Legendary” Tariffs Hit Hard: China Faces 104% Levy in Trade War Escalation
