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Other trading partners er being hit with 15-20 % tariffs.
Other trading partners er being hit with 15-20 % tariffs.
What is happening?
In a sharp escalation of his protectionist agenda, U.S. President Donald Trump announced a 35% tariff on Canadian imports, set to take effect August 1.
The move marks a significant jump from the current 25% rate and signals a broader hardline stance as Trump reshapes his trade strategy ahead of upcoming negotiations.
Canada Warns of Retaliation, Vows to Defend Workers
Canadian Prime Minister Mark Carney responded swiftly, stating that Canada would “defend Canadian workers and businesses” in talks with the U.S.
The looming tariff hike poses a major hurdle to Carney’s goal of finalizing a trade deal with Washington by July 21.
USMCA Exemptions and Energy Tariffs Remain—For Now
While the new tariffs hit broadly, Trump’s administration confirmed that goods covered by the USMCA (U.S.-Mexico-Canada trade deal) will remain exempt.
Tariffs on energy and fertilizer imports from Canada are also expected to hold steady, though Trump has left the door open for future adjustments.
Trump Cites Fentanyl, Trade Imbalances as Justification
In a letter posted to his social platform, Trump accused Canada of enabling the flow of fentanyl into the U.S. and erecting trade barriers harmful to American farmers, particularly in the dairy sector.
He cited the growing U.S. trade deficit as both an economic and national security threat.
Carney Pushes Back on Fentanyl Claims
Canadian officials downplayed Trump’s fentanyl accusations, noting that only a small amount originates from Canada.
Carney reiterated that his government had made “vital progress” in addressing the opioid crisis and remained committed to working with the U.S. on border security and public health.
Japan, Korea, EU Also Targeted
Trump has recently slapped new tariffs on Japan and South Korea and is expected to announce measures targeting the European Union.
Coming for Other Countries, Trump Warns
In an NBC News interview, Trump indicated that more countries could face blanket tariffs of 15% to 20%, regardless of formal notices.
“We’re just setting our tariffs,” he said, hinting at a sweeping realignment of trade terms globally.
Nations Scramble to Respond
Myanmar’s military leadership has already requested a tariff reduction from 40% to 10-20%, offering to send negotiators to Washington.
Meanwhile, the president of the Philippines is preparing for his first meeting with Trump to address their own 20% tariff issue.
High Stakes for U.S.-Canada Trade Relationship
Canada is America’s second-largest trading partner after Mexico and its number-one buyer of exports.
In 2024, Canada bought nearly $350 billion in U.S. goods, while exporting over $410 billion to the U.S., underscoring how deeply intertwined the two economies are.
Carney’s Trade Deal Plans Hit a Wall
Carney, fresh off an election win centered on strengthening U.S.-Canada trade ties, has seen his ambitions stall.
A planned digital services tax was scrapped after Trump walked out of trade talks, calling it a “blatant attack”—a sign of how turbulent the road to any new deal may be.
