The U.S. is intensifying its trade confrontation with Canada as President Donald Trump declared a 35% tariff on Canadian imports, set to take effect August 1. In a letter to Canadian Prime Minister Mark Carney, Trump warned that the rate could rise further if Canada retaliates. This move marks a sharp increase from the current 25% tariff and deals a blow to ongoing negotiations for a bilateral trade agreement.
Carney responded on social media, stating that Canada would continue to protect its workers and businesses while working toward a resolution before the deadline. The new tariff complicates efforts to finalize a trade pact, which both leaders had previously aimed to conclude within 30 days. However, exemptions for goods under the USMCA trade deal are expected to remain, alongside unchanged tariffs on energy and fertilizer.
Trump justified the tariff hike by accusing Canada of allowing fentanyl to enter the U.S. and maintaining unfair trade barriers against American dairy farmers. He tied potential tariff adjustments to Canada’s cooperation in curbing fentanyl flows—a claim Canadian officials reject, stating that only a tiny fraction of the drug originates from their country.
Despite tensions, Carney emphasized Canada’s commitment to collaborating with the U.S. on security and trade. “We have made vital progress in combating fentanyl and will keep working with the U.S. to protect our communities,” he stated. With the August deadline looming, the question remains: Will both sides reach a compromise, or will this tariff war deepen economic strains between the two nations?