President Donald Trump has said that he will impose a 35% tariff on Canadian goods starting August 1, even if the two countries are a few days away from the deadline for self-challenges to reach new trade agreements.
The announcement came in the form of a letter published on Trump's social media platform Truth Social, along with the additional threat of 15% or 20% blanket tariffs for most trading partners.
Canadian Prime Minister Mark Carney said his government will continue to protect workers and businesses in his country while he heads towards a new deadline.
Trump sent over 20 such letters this week to other US partners. He also says that new tariffs on the European Union will soon be announced.
Like the Canadian letter, Trump vowed to implement these tariffs by August 1st.
Some Canadian goods already have a 25% tariff, and the country is also lean on Trump's global steel, aluminum and automotive rates.
For now, US media reports that the Canadian-Unified Provincial Mexico Agreement (CUSMA) exemption applies to this latest tariff threat.
Trump also imposes a global tariff of 50% on aluminum and steel imports and a 25% tariff on all cars and trucks not built in the US.
He recently announced a 50% tariff on copper imports, which is expected to come into effect next month.
Canada sells about three-quarters of its products to the US, and is a major supplier of automotive manufacturing hubs and metals, and US tariffs are particularly damaging to these sectors.
According to Trump's letter, the 35% tariff is separate from those sector-specific collections.
“As you know, if a company in Canada or in your country decides to build or manufacture products in the US, there are no customs duties,” Trump said.
He also linked the tariffs to what he called a “Canadian failure” to stop the flow of fentanyl to the United States, along with Canada's existing taxation on US dairy farmers and the trade deficit between the two countries.
“If Canada worked with me to stop the flow of fentanyl, I'll probably consider adjusting this letter. These tariffs may change upward or downward depending on your relationship with your country,” Trump said.
Trump previously accused Canada (along with Mexico) of “a huge number of people coming, and fentanyl coming.”
In his response to X, Carney said Canada has made essential advances to “stop the fentanyl tragedy” in North America, and that his government has pledged to continue working with the US to protect the communities of both countries.
According to data from the U.S. Customs and Border Patrol, only about 0.2% of all attacks of fentanyl that enter the U.S. take place at the Canadian border. Most of the rest has been confiscated at the US border with Mexico.
Earlier this year, Canada also announced more funding for border security and appointed Fentanyl TSAR in response to Trump's complaints.
Canada has been engaged in intense consultations with the US over the past few months to arrive at new trade and security transactions.
At the G7 summit in June, Carney and Trump said they had promised to reach a new contract within 30 days and set a July 21 deadline.
Trump threatened to increase taxes in Canada if he retaliated. Canada has already imposed a counter-off on the US and has vowed more if the deal is not reached by the deadline.
In late June, Carney removed taxes on large US tech companies after Trump labeled it as a “blatant attack” and threatened to halt trade talks.
Carney said the tax was removed as “part of a larger negotiation” over trade between the two countries.
On Friday, Canadian Industry Minister Melanie Jolly rejected a media question about whether Ottawa is doing enough to support Canadians, saying, “We are not going to negotiate publicly.”