President Donald Trump has announced plans to impose a 35% tariff on Canadian goods starting August 1 unless Canada takes action to reduce the flow of fentanyl into the United States. This move escalates trade tensions between the two countries, with Trump suggesting that the current 25% tariff could increase unless Canada cooperates.
In a letter to Canadian Prime Minister Mark Carney, Trump indicated that Canada might avoid the higher tariff if it works with the U.S. to combat the fentanyl crisis. He stated that the tariffs could be adjusted based on the state of U.S.-Canada relations.
A White House official confirmed that products compliant with the U.S.-Mexico-Canada Agreement would be exempt from the new tariff, similar to the previous 25% rate. However, goods that are "transshipped" through other countries to bypass tariffs would still face the increased rate.
Trump criticized Canada’s trade policies, particularly regarding dairy farmers, claiming that Canada imposes tariffs as high as 400% on American dairy products. He argued that these policies contribute to a significant trade deficit, which he sees as a threat to the U.S. economy and national security.
This tariff threat comes amid broader plans by Trump to increase tariffs on various countries, including those that have not yet been notified of changes. He mentioned that a new tariff schedule would soon be sent out to multiple nations, including members of the European Union and Canada.
In recent days, Trump has been vocal about new tariffs, even warning Brazil of a potential 50% increase in tariffs due to the country’s treatment of former President Jair Bolsonaro. He expressed strong support for Bolsonaro, calling the legal actions against him an attack on a political opponent.
As the situation develops, the potential impact on trade and diplomatic relations between the U.S. and Canada remains to be seen.