President Trump has threatened to impose a 35% tariff on Canadian goods starting August 1, escalating trade tensions as he ties tariffs to issues like fentanyl importation and existing Canadian dairy tariffs.
Trump Proposes 35% Tariffs on Canadian Goods Amid Trade Negotiations
Trump Proposes 35% Tariffs on Canadian Goods Amid Trade Negotiations
The announcement comes just days before a self-imposed deadline for reaching a new trade agreement between the US and Canada.
US President Donald Trump has issued a stark warning to Canada, announcing plans to impose a hefty 35% tariff on Canadian goods effective August 1. This initiative comes on the heels of a self-imposed deadline approaching for a new trade deal between the two nations. The tariff threat follows Trump's broader strategy, which includes proposed tariffs of 15% to 20% on other trade partners and an impending announcement on tariff adjustments for the European Union.
Details of the new Canadian tariffs were revealed in a letter Trump shared on social media with Prime Minister Mark Carney. Currently, the US has levied a 25% tariff on a selection of Canadian imports, impacting industries significantly, particularly in steel, aluminum, and automotive sectors. With Canada exporting approximately 75% of its goods to the US, analysts warn that these tariffs could instigate severe repercussions for Canadian businesses, especially those reliant on US markets.
Trump's letter indicated that these new tariffs would apply separately from previous sector-specific levies and linked their imposition to Canada's handling of fentanyl trafficking and tariffs imposed on US dairy farmers. In a particularly dramatic declaration, Trump stated that he might reconsider the tariffs if Canada collaborates with the US to mitigate fentanyl flow and address the trade deficit.
The administration's claim regarding fentanyl is contentious; US data shows that a minuscule portion of fentanyl seizures occur at the Canadian border. In response to prior criticisms, Canada has taken measures like increasing border security funding and appointing a fentanyl czar to bolster its defenses against the drug trade.
Notably, the two nations have been intensively negotiating to finalize a new trade and security agreement. During the recent G7 Summit, both Trump and Carney communicated their commitment to reaching an agreement within 30 days, setting July 21 as a key deadline.
Furthermore, Trump cautioned against possible retaliatory actions from Canada, suggesting that any counter-moves could lead to escalated tariffs on Canadian goods. Canada had previously retaliated with its own counter-tariffs on US imports, further complicating the diplomatic landscape.
Despite the rising tensions, the Prime Minister's office has yet to respond to Trump's threats, indicating a wait-and-see approach as both countries navigate the murky waters of trade relations and policy negotiations that could reshape not only their bilateral ties but also broader market dynamics.
