Trump’s 35% Tariff Plan Risks US-Canada Trade War/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Trump plans a 35% tariff on Canadian imports, escalating tensions with America’s northern neighbor. Canada pushes back, vowing to protect its economy while seeking stronger ties with Europe and Britain. The looming tariffs add uncertainty to global markets and North American trade relations ahead of an August deadline.
Quick Look: Trump’s Canada Tariff Threat
- Trump proposes raising tariffs to 35% on Canadian goods
- Canada pledges to protect workers and seek new partnerships
- Trade uncertainty grows ahead of August 1 deadline
Trump’s 35% Canada Tariff Threat Deepens Trade Rift Between Neighbors
Deep Look
WASHINGTON (AP) — President Donald Trump has announced plans to impose a steep 35% tariff on many Canadian imports, escalating tensions between the United States and one of its closest allies and trading partners.
In a letter sent Thursday to Canadian Prime Minister Mark Carney, Trump revealed the higher tariff rate—a significant jump from the 25% tariffs he first levied in March after months of warnings. Trump has tied the tariffs partly to pressuring Canada to crack down on fentanyl trafficking, despite minimal evidence linking significant fentanyl flows to the U.S.-Canada border.
“The flow of fentanyl is hardly the only challenge we have with Canada, which has many tariff and non-tariff policies and trade barriers,” Trump wrote.
The new tariffs are set to take effect August 1. Investors are bracing for volatility in the coming weeks, even as recent gains in the S&P 500 indicate some believe Trump might ultimately retreat from the full tariff hike. Early Friday, stock market futures dipped, signaling fresh market unease over Trump’s flurry of tariff threats.
Canada Pushes Back
Prime Minister Carney responded in a social media post that Canada remains committed to negotiating a trade framework with the United States and noted that the country has made “vital progress” in fighting fentanyl trafficking.
“Through the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” Carney said.
Canada—America’s second-largest trading partner after Mexico—has increasingly become a target for Trump’s tariff threats. In retaliation, Canada has imposed its own tariffs on U.S. goods and firmly rejected Trump’s occasional suggestions that Canada could become the “51st state.”
In contrast, Mexico has faced similar 25% tariffs over fentanyl concerns but has not encountered the same level of public criticism from Trump.
Carney, who became prime minister in April, has sought to reduce Canada’s dependency on the U.S. by strengthening economic ties with the European Union and the United Kingdom. On Thursday, hours before Trump’s letter, Carney posted a photo on X alongside British Prime Minister Keir Starmer, declaring:
“In the face of global trade challenges, the world is turning to reliable economic partners like Canada.”
Trade Talks in Jeopardy
While Carney’s May visit to the White House appeared amicable, Trump declared that there was nothing the Canadian leader could say to convince him to lift the tariffs.
Daniel Beland, a political scientist at McGill University in Montreal, warned Trump’s tariff hikes would further complicate any hope of a trade deal.
“It doesn’t mean a new trade deal between Canada and the United States is impossible, but it shows how hard it is for the Canadian government to negotiate with a U.S. president who regularly utters threats and doesn’t appear to be a reliable and truthful interlocutor,” Beland said.
Trump’s Tariff Spree Expands
Trump’s letter to Carney is part of a broader wave of tariff notices he’s sent to 23 countries. The former president has imposed or threatened significant tariffs on several nations, including a 50% tariff on Brazil over the trial of former President Jair Bolsonaro. Trump’s own legal troubles have fueled comparisons, given his indictments related to efforts to overturn his 2020 election defeat.
Although Trump has previously said tariffs were aimed at isolating China economically, his latest actions have broadened the target list. Chinese officials criticized Trump’s tactics, calling them coercive and a violation of international norms.
“Tariffs should not be used as a tool for coercion, bullying and interference in the internal affairs of other countries,” said Mao Ning, a Chinese Foreign Ministry spokesperson.
Trump’s tariff threats have complicated efforts to negotiate new trade agreements. Following financial market turmoil triggered by his initial “Liberation Day” tariffs announced in April, Trump initiated a 90-day period with a 10% baseline tariff on most imports. However, he has since indicated he intends to raise those rates.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%,” Trump told NBC News this week.
Canada-U.S. Relations on Edge
Trump has struck limited trade deals with the United Kingdom, Vietnam, and China. Despite raising tariffs on Chinese imports as high as 145%, he’s said negotiations have reduced that rate to around 55%.
Relations with Canada have been particularly rocky. In June, Trump temporarily suspended trade talks with Ottawa over Canada’s plan for a digital services tax, which would have significantly affected U.S. tech firms. Talks resumed after Carney announced the tax was being postponed.
Currently, many goods remain protected under the 2020 United States-Mexico-Canada Agreement (USMCA), insulating them from Trump’s tariffs. However, a review of the agreement is slated for 2026, which could bring fresh uncertainty to North American trade relations.
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