WASHINGTON, US. – U.S. President Donald Trump has escalated trade tensions with Canada, vowing to impose a 35% tariff on Canadian goods starting August 1, just days before a critical deadline to renegotiate a new bilateral trade deal.
In a letter published Thursday on his social media platform Truth Social, Trump accused Canada of unfair trade practices, citing a persistent trade deficit, levies on U.S. dairy farmers, and what he called Canada’s “failure” to curb the flow of fentanyl into the U.S.
“There will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump wrote, adding that the 35pc duty is separate from ongoing sector-specific levies.
The announcement comes amid intensified efforts by both countries to forge a new trade and security agreement ahead of a self-imposed July 21 deadline.
Canadian Prime Minister Mark Carney responded firmly, stating that Ottawa will “continue to protect Canadian workers and businesses” and remain committed to negotiations.
Trump’s letter marks the latest in a flurry of more than 20 similar notices sent to U.S. trade partners this week, with the former president also threatening new tariffs on the European Union.
The U.S. has already imposed or announced sweeping duties on steel (50%), aluminium (50%), vehicles (25%), and copper (50%) imports globally.
Uncertainty Over CUSMA Exemptions
It remains unclear whether the new 35% blanket tariffs would apply to goods covered under the Canada-United States-Mexico Agreement (CUSMA), which currently exempts certain products from Trump’s earlier tariff regimes.
Canada, which exports nearly 75pc of its goods to the U.S., would be particularly vulnerable to such measures.
Its auto industry and metals sector—especially steel, aluminium, and copper—stand to bear the brunt of the penalties.
Fentanyl Dispute Fuels Trade Row
Trump also linked the tariffs to his long-running grievances about fentanyl trafficking, accusing Canada and Mexico of failing to stop illicit drugs from entering the U.S.
“If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment to this letter,” he said.
However, U.S. Customs and Border Protection data shows that only 0.2% of fentanyl seizures in the U.S. occur at the Canadian border, with the vast majority intercepted at the southern border with Mexico.
In response to previous criticisms, Canada has boosted funding for border security and appointed a “fentanyl czar” earlier this year.
Carney noted that Canada has made “essential progress” on the issue and reiterated his commitment to cross-border cooperation.
Trump warned of harsher tariffs if Canada retaliates. Ottawa has already imposed counter-tariffs and hinted at further action if the two nations fail to reach a deal by the July deadline.
In a recent gesture of goodwill, Carney’s administration dropped a digital tax on large U.S. tech firms after Trump branded it a “blatant attack” and threatened to suspend negotiations.
“The tax was dropped as part of a bigger negotiation,” Carney said in June during the G7 summit, where both leaders reaffirmed their intent to finalise a deal within 30 days.
With tensions flaring and just over a week left before the deadline, the path forward remains uncertain. But both sides appear determined to strike a deal—despite Trump’s hardball tactics.
