US President Donald Trump has announced a sweeping 35% tariff on all imports from Canada, due to take effect on 1 August. The move marks a significant escalation in his trade war and includes threats of further blanket tariffs of 15% to 20% on most other global trade partners.
In a letter released on his social media platform on Thursday, Trump informed Canadian Prime Minister Mark Carney of the new tariff, warning that the rate could increase further if Canada retaliates.
Carney responded on X, stating that his government would “continue to defend Canadian workers and businesses” as negotiations with the United States continue in the lead-up to the deadline.
The announcement follows a series of steep tariffs introduced by Trump in recent months, including a 25% levy on Canadian cars and auto parts in March, and a 50% tariff on steel and aluminium in June. The newly announced rate would now cover all remaining Canadian goods entering the US market.
Canada and the US remain engaged in high-stakes trade negotiations aimed at salvaging their economic relationship. However, Trump’s latest move threatens to derail talks, casting doubt over the future of the United States-Mexico-Canada Agreement (USMCA), the trilateral trade deal that replaced NAFTA in July 2020.
This latest tariff threat is one of more than 20 letters Trump has issued since Monday, as he continues to target trading partners worldwide. In addition to Canada, the former president has aimed at Mexico, Japan, South Korea, and others, even floating a 50% tariff on copper.
Despite the aggressive rhetoric, the new tariffs may never take full effect. The Trump administration is currently appealing a ruling from the U.S. Court of International Trade, which in May determined that he had exceeded his legal authority by imposing tariffs under emergency powers without a legitimate emergency. If the administration loses its appeal, set to be heard at 10 a.m. on 31 July at the US Court of Appeals for the Federal Circuit in Washington, the tariffs could be nullified.
Canadian, Mexican reportedly exploring concessions
Canada and Mexico are both reportedly exploring concessions to placate Trump and restore stability to the USMCA, which is due for formal review by July next year.
Earlier this year, both countries were hit with 25% US tariffs on a variety of goods, although Canada received a lower rate on energy exports. Trump justified the tariffs by accusing both neighbours of failing to control illegal immigration and drug trafficking across their borders.
However, some exemptions were granted for products covered under the USMCA, sparing large categories of goods from the tariffs.
The latest escalation comes despite a recent thaw in relations between Trump and Carney. The two leaders met at the White House on 6 May, reportedly holding a cordial meeting in the Oval Office. Carney had agreed to rescind Canada’s digital services tax, which would have impacted US tech giants, after Trump abruptly paused trade talks last month in response to the levy.
In an interview with NBC News published Thursday, Trump said the imposition of tariffs would now proceed broadly and swiftly, even without issuing further warnings.
“Not everybody has to get a letter. You know that,” Trump said. “We’re just setting our tariffs. 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.”
