Trump threatens Canada with 35 per cent tariff rate

 President Donald Trump has informed Canadian Prime Minister Mark Carney that the United States will impose a 35 percent tariff on Canadian exports beginning August 1. The announcement, made in a formal letter on Thursday, |July 10, adds Canada to a growing list of countries targeted in Trump’s latest wave of trade actions.

This development comes amid ongoing trade negotiations between Canada and the U.S., which had aimed for a resolution by July 21. However, the tariff threat appears to have reset that timeline. Both Canada and Mexico are currently working to find a compromise that would preserve the United States-Mexico-Canada Agreement (USMCA), the trilateral trade deal that replaced NAFTA in July 2020.

 

“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,” Carney said in a post on social media platform X late Thursday.

 

Since Monday, July 7, Trump has issued more than 20 letters to foreign governments, announcing new tariffs or warning of forthcoming penalties. Canadian and Mexican exports were among the first to be hit under Trump’s broader trade strategy, initially facing 25 percent tariffs. However, Canadian energy products were granted a lower rate and certain goods were later exempted under the USMCA framework.

 

Trump has previously accused both Canada and Mexico of not doing enough to curb illegal immigration and drug trafficking into the United States. Despite intermittent diplomatic tensions, Trump and Carney have maintained a surprisingly warm rapport. The two leaders met at the White House on May 6 and again during last month’s G7 summit in Canada, where international leaders had urged Trump to ease his trade measures.

 

Notably, Canada had recently agreed to roll back taxes on U.S. tech companies — a move seen as a goodwill gesture — following earlier threats from Washington that led to stalled negotiations.

 

Meanwhile, Trump revealed in an NBC interview that blanket tariffs of between 15 and 20 percent may also be imposed on other countries starting August 1, especially those that have not received one of his formal letters. He noted that a letter to the European Union, the U.S.'s largest trading partner, would be sent “today or tomorrow (Friday).”

 

In the case of Brazil, Trump warned of tariffs reaching as high as 50 percent unless an agreement is reached. Brazilian President Luiz Inácio Lula da Silva responded on Thursday by expressing willingness to negotiate, but he emphasized that his government is also considering reciprocity measures. Trump’s letter to Lula included criticism of the Brazilian government’s treatment of former President Jair Bolsonaro, a close Trump ally.

 

The escalating tariff threats have added uncertainty to the future of the USMCA and raised concerns among global trade observers about a new round of economic confrontation spearheaded by Washington.