In a move that has sent shockwaves through international trade circles, President Donald Trump has declared that Canadian exports to the United States will be subject to a 35 percent tariff beginning August 1. The announcement, delivered in a letter to Canadian Prime Minister Mark Carney, marks the latest escalation in a series of aggressive trade maneuvers by the U.S. administration.
This letter is part of a wave of more than 20 similar communications sent by Trump to various global leaders since Monday, each outlining new or increased tariffs as part of his ongoing efforts to reshape America’s trade relationships.
Negotiations between Canada and the U.S. had been progressing with hopes of reaching a new agreement by July 21. However, the imposition of the tariff has now shifted the urgency and direction of those talks. Both Canada and Mexico are working to address Trump’s demands in order to keep the United States-Mexico-Canada Agreement (USMCA) viable.
Prime Minister Carney, speaking on social media, reaffirmed Canada’s commitment: “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.”
The USMCA, which replaced NAFTA in July 2020, was scheduled for review next year. Trump’s recent moves have thrown the process into uncertainty, particularly as previous rounds of tariffs had already hit Canadian and Mexican goods, with some exceptions for Canadian energy.
Trump’s rationale for the tariffs includes claims that Canada and Mexico have not done enough to curb illegal immigration and the flow of illicit drugs, especially fentanyl, into the U.S. Notably, Canadian and American data indicate that Canada’s contribution to the U.S. fentanyl supply is less than one percent.
Despite the new tariff threat, exemptions for goods under the USMCA are expected to remain in place, according to unnamed officials cited by Bloomberg. The letter comes at a time when relations between Trump and Carney had appeared to improve, with recent meetings at the White House and the G7 summit.
Trump has also hinted at broader tariff actions, including potential blanket tariffs of 15 to 20 percent on other countries and a 50 percent tariff on Brazilian imports, unless new terms are negotiated. Brazilian President Luiz Inácio Lula da Silva has expressed willingness to negotiate but warned of reciprocal measures.
Okay.ng reports that the evolving trade landscape has left businesses and policymakers on edge as the August 1 deadline approaches.
