US President Donald Trump announced on Thursday plans to impose a 35% tariff on goods imported from Canada, effective August 1, writes UNN with reference to Axios.
Details
The latest twist in the trade war with Canada came after the key US trading partner canceled a digital services tax to advance broader trade negotiations with Washington as part of efforts to reach an economic agreement before the July 21 deadline.
Recently, Trump has taken an overtly aggressive stance towards Canada, threatening to completely halt negotiations on the digital services tax, and now to impose a new levy while both sides are negotiating, the publication writes.
"Instead of cooperating with the United States, Canada has imposed its own tariffs," Trump wrote in a letter to Canadian Prime Minister Mark Carney, which he published on Truth Social.
"From August 1, 2025, we will charge Canada a 35% tariff on Canadian products supplied to the United States, separate from all sectoral tariffs," Trump said in the letter, in which he accused Canadian officials of insufficient measures to stop the flow of fentanyl across the border.
"The tariff will not be imposed if Canada or companies in your country choose to produce goods in the United States," he added. "If for some reason you decide to raise tariffs, then the amount you raise them by will be added to the 35% we charge."
Carney stated on X that the Canadian government had "steadfastly defended our workers and businesses" and "will continue to do so as we approach the revised August 1 deadline."
Stock futures fell sharply after Trump's letter to Canada was published, and the S&P 500 index showed a decline of almost 0.6% by Thursday evening.
"The US dollar is rising against most major currencies, and volatility forecasts are intensifying again as traders brace for further instability," wrote Karl Schamotta, chief market strategist at Corpay, in his note on Thursday evening.
Addition
Canada is the most significant trading partner among more than 20 countries that received a letter threatening tariffs from Trump this week. On Thursday, Trump told NBC News that he plans to impose tariffs of 15% or 20% on most trading partners.
Trump has repeatedly accused Canadian officials of allowing fentanyl to cross the border into the US, even though data shows that less than 1% of fentanyl seized in the United States last year came through Canada.
Meanwhile, Canadian officials accuse the US of a flow of illegal weapons into Canada.