US President Donald Trump announced a sweeping new 35% tariff on Canadian imports, escalating trade tensions between the two countries ahead of a planned resumption of bilateral talks.
The new tariffs will take effect on August 1, according to a letter Trump posted Thursday on his Truth Social platform.
The latest move adds to a series of trade measures already in place against Canada, including 50% tariffs on steel and aluminium, 25% duties on autos, and a new 50% levy on copper shipments scheduled to begin next month.
Trump warned that the 35% tariff would apply in addition to these existing sectoral tariffs and could rise further if Ottawa continues to retaliate.
“Instead of working with the United States, Canada retaliated with its own Tariffs,” Trump wrote in the letter addressed to Canadian Prime Minister Mark Carney.
He also referenced Canada’s role in the ongoing opioid crisis, stating:
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter.”
Canadian response
In response, Prime Minister Carney defended Canada’s trade and public health efforts in a post on X, formerly Twitter.
“Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries,” he wrote.
Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.
Canada has made vital progress to stop the scourge
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“The Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.”
Carney’s remarks come as Ottawa prepares for a new round of trade negotiations with Washington, following a June 29 agreement to restart talks and a target date of July 21 to reach a revised trade framework, according to a statement from Canada’s Department of Finance.
Tariff measures tied to fentanyl, trade imbalance
Trump cited the flow of fentanyl and trade imbalances as primary reasons for the tariff hikes.
He claimed Canada imposes both “Tariff and Non-Tariff Policies and Trade Barriers” that result in “unsustainable Trade Deficits against the United States,” which he described as a threat to both the US economy and national security.
The United States’ total goods trade with Canada stood at $761.8 billion in 2024, with a $62 billion trade deficit, according to US Census Bureau data.
In the first five months of 2025, the US goods trade deficit with Canada widened by 9.8% year-on-year to $25.6 billion.
Imports from Canada currently attract a 25% levy imposed earlier this year over concerns about the country’s alleged role in facilitating fentanyl exports.
However, products compliant with the United States-Mexico-Canada Agreement (USMCA) have been exempt.
Canadian energy exports are subject to a lower 10% tariff.
Canada’s countermeasures
Canada responded earlier this year with 25% tariffs on US exports that fall outside USMCA terms, including non-compliant vehicles, steel, aluminium, apparel, food, and electronics.
Ottawa stated in March that these countermeasures would remain in place “until the US eliminates its tariffs against Canadian steel and aluminum products.”
The latest US tariffs were announced despite recent signs of diplomatic progress.
Washington had previously threatened to end all trade negotiations after Canada refused to suspend a proposed digital services tax on American tech firms.
Ottawa eventually withdrew the proposal in a bid to restart formal negotiations.
The post Trump raises tariffs on Canadian imports to 35%, escalating trade tensions appeared first on Invezz
