President Donald Trump announced on Thursday that Canada will face a 35% tariff on exports to the United States starting August 1, according to a letter sent to Prime Minister Mark Carney.
This marks the latest in a series of over 20 letters Trump has issued since Monday, escalating his trade war rhetoric against multiple countries.
Canada and the U.S. have been engaged in ongoing trade talks, aiming for an agreement by July 21.
However, the latest tariff threat appears to have cast doubt over that timeline.
Both Canada and Mexico are trying to find ways to satisfy Trump so that the free trade deal uniting the three countries — known as the USMCA — can be put back on track.
“Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses.
We will continue to do so as we work towards the revised deadline of August 1,“ Carney posted on the social media platform X Thursday night.
The United States-Mexico-Canada Agreement replaced the previous NAFTA accord in July 2020, after Trump successfully pushed for a renegotiation during his first term in office.
It was due to be reviewed by July next year, but Trump has thrown the process into disarray by launching his trade wars after he took office in January.
Canadian and Mexican products were initially hard hit by 25pc US tariffs, with a lower rate for Canadian energy.
Trump targeted both neighbours, saying they did not do enough on illegal immigration and the flow of illicit drugs across borders.
But he eventually announced exemptions for goods entering his country under the USMCA, covering large swaths of products.
The letter on Thursday came despite what had been warming relations between Trump and Carney, who has been faced with his counterpart’s regular musings that Canada should become the 51st US state.
Reciprocity
The Canadian leader came to the White House on May 6 and had a cordial meeting with Trump in the Oval Office.
They met again at the G7 summit last month in Canada, where leaders pushed Trump to back away from his punishing trade war.
Canada also agreed to rescind taxes impacting US tech firms that had prompted Trump to retaliate by calling off trade talks.
Separately, Trump announced in an interview with NBC that he was also thinking of slapping blanket tariffs of between 15pc and 20pc on August 1 on countries that had not yet received one of his letters.
The letters announce tariff rates of as much as 50pc in the case of Brazil to kick in on August 1 unless better terms can be found before then.
Trump told NBC that the letter to the 27-country European Union, the US’s biggest trading partner, would be sent “today or tomorrow (Friday).”
Brazilian President Luiz Incio Lula da Silva said on Thursday that he is willing to negotiate with the United States after Trump said he would hit the country with his tough tariff.
He, however, reiterated that the Brazilian government is evaluating reciprocity measures. In his letter addressed to Lula, Trump criticised the treatment of his right-wing ally Jair Bolsonaro.
