U.S. President Donald Trump announced that the United States will impose a 35% tariff on imports from Canada starting August 1. This sharp increase, up from the current 25%, marks a significant escalation in the trade tensions between the two nations. Trump conveyed the decision in a letter to Canadian Prime Minister Mark Carney, released via his social media platform.
The new tariff comes as a blow to Canadian Prime Minister Mark Carney, who had been working towards finalizing an economic and security agreement with the U.S. by July 21. Trump's letter warned that the tariff could rise further if Canada retaliates, raising the stakes for ongoing negotiations.
Despite the tariff hike, Trump’s administration clarified that goods covered under the United States-Mexico-Canada Agreement (USMCA) would continue to be exempt. Additionally, current 10% tariffs on Canadian energy and fertilizer are expected to stay unchanged, although Trump has yet to make a final decision on those sectors.
In his letter, Trump accused Canada of enabling the cross-border flow of fentanyl—a synthetic opioid—and criticized Canadian tariff and non-tariff barriers that impact U.S. farmers, particularly in the dairy sector. He claimed these factors contribute to a trade deficit that he views as a threat to both the U.S. economy and national security.
Canadian officials pushed back, saying only a minimal amount of fentanyl originates from Canada, and emphasized recent efforts to strengthen border controls. Nonetheless, Trump indicated that cooperation from Canada on stemming the flow of fentanyl could lead to reconsideration of the tariffs.
“If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote.
Prime Minister Carney’s office has not yet issued an official response.
Beyond Canada, Trump signaled an expansion of his protectionist trade policy. In a recent interview with NBC News, he stated that countries not yet targeted would soon face general tariffs of either 15% or 20%, regardless of individual negotiations or prior arrangements.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” he said.
Trump has already levied new tariffs on key allies, including Japan and South Korea, and introduced a steep 50% duty on copper imports.
Canada ranks as the U.S.'s second-largest trading partner after Mexico and is the top buyer of American exports. In 2024, Canada purchased $349.4 billion worth of U.S. goods and exported $412.7 billion to the U.S., according to data from the U.S. Census Bureau. The high interdependence between the two economies adds urgency to resolving the trade conflict.
Despite earlier optimism, Trump’s letter did not comment directly on the status of the new trade pact under discussion. However, he indicated flexibility in tariff levels, depending on the progress of bilateral relations:
“Tariffs may be modified, upward or downward, depending on our relationship with your Country.”
In a previous dispute, Canada scrapped plans to impose a digital services tax aimed at American tech giants after Trump abruptly ended trade talks, calling the move a “blatant attack” on U.S. interests.
Conclusion:
The announcement of a 35% tariff on Canadian imports marks a dramatic escalation in U.S. trade policy under President Trump. With additional blanket tariffs planned for other nations, the coming weeks could reshape global trade dynamics and further strain U.S. relations with key allies.