United States President Donald Trump has announced a 35% tariff on Canadian exports to the United States effective from August 1.
The move was communicated in a letter to Canadian Prime Minister Mark Carney on Thursday, adding to over 20 of similar letters Trump has issued to world leaders this week as part of a renewed push in his global trade offensive.
The announcement threatens to derail ongoing negotiations between Canada and the U.S., which had been working toward a July 21 deadline to resolve trade disputes and stabilise the trilateral United States-Mexico-Canada Agreement (USMCA).
Canada and Mexico were scrambling to meet the new August 1 deadline to avoid further disruption.
“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,” Prime Minister Carney said in a post on X (formerly Twitter) Thursday night.
The USMCA, which replaced NAFTA in July 2020 following Trump’s push for a renegotiated deal during his first term, was due for a review in mid-2026.
However, Trump’s escalating trade threats have thrown the process into uncertainty. Canada and Mexico were previously hit with U.S. tariffs of up to 25%, with Canadian energy exports receiving a slightly lower rate.
Trump has repeatedly accused both countries of failing to curb illegal immigration and the trafficking of drugs, especially fentanyl, into the U.S., even though official U.S. and Canadian data show Canada contributes less than 1% of illicit fentanyl to the American market.
Despite past exemptions for USMCA-covered goods, Bloomberg reported on Thursday, citing an unnamed official, that these were expected to remain unchanged. Still, the broader implications of the August 1 tariff threats have sparked concern.
Trump’s letter to Canada came amid what had appeared to be a thaw in relations between the two countries.
Prime Minister Carney met with Trump at the White House on May 6, and the pair shared a cordial moment at last month’s G7 summit in Canada, where other world leaders urged Trump to reconsider his aggressive trade stance.
Canada recently rescinded digital taxes on U.S. tech firms, a move widely viewed as a concession to ease trade tensions. In response, Trump resumed talks, though Thursday’s tariff letter casts doubt on that progress.
In a separate interview with NBC, Trump revealed plans to impose blanket tariffs of 15% to 20% on countries not yet targeted in his recent letters. He indicated that a letter to the European Union, the U.S.’s largest trading partner, would be issued “today or tomorrow.”
Trump also targeted Brazil with tariff threats of up to 50%, prompting a response from Brazilian President Luiz Inácio Lula da Silva.
While Lula said Brazil is open to negotiation, he also emphasised the country is reviewing possible retaliatory measures. Trump’s letter reportedly criticised Brazil’s treatment of former President Jair Bolsonaro, a close Trump ally.
