U.S. President Donald Trump announced a 35% tariff on Canadian imports starting August 1, escalating trade tensions amid ongoing negotiations. The move, outlined in a letter to Canadian Prime Minister Mark Carney, threatens further increases if Canada retaliates. Carney vowed to defend Canadian workers and businesses, emphasizing progress in cross-border cooperation to combat fentanyl trafficking.
The tariffs mark a sharp rise from the current 25% rate and complicate efforts to finalize a trade pact under the United States-Mexico-Canada Agreement (USMCA). While exemptions for USMCA-covered goods are expected to remain, Trump criticized Canada's trade barriers and fentanyl policies, linking them to U.S. economic and national security concerns.
Trump's broader trade strategy includes blanket tariffs of 15-20% on most trading partners, targeting allies like Japan and South Korea, alongside a 50% levy on copper. Analysts warn these measures could strain global supply chains and inflate consumer prices.
Canadian officials disputed claims about fentanyl origins, noting enhanced border controls. Carney reiterated commitments to bilateral cooperation, stating: "We are working to protect communities in both our countries." The developments come weeks after both leaders aimed to conclude a new economic deal within 30 days.
