In a dramatic escalation of his trade agenda, President Donald Trump on Thursday threatened to slap a 35% tariff on Canadian goods — a move that could disrupt billions in cross-border trade and rattle one of America’s most crucial economic relationships.
In a separate interview with NBC News, Trump also suggested he may double existing tariffs on most other U.S. trading partners, potentially raising rates to 20% or more.
Tariffs Take Center Stage Again
This marks the latest twist in Trump’s unpredictable trade strategy, which has kept investors, business leaders, and foreign governments on edge. The proposed Canadian tariffs are set to take effect August 1, though it remains unclear whether they would apply to all goods or just those not covered under the U.S.-Mexico-Canada Agreement (USMCA).
According to a U.S. administration official, the current plan is to raise tariffs from 25% to 35% on Canadian goods already subject to duties, while USMCA-exempt products would likely remain untouched. But no official policy memo has been released, and the final decision still rests with Trump.
Canadian Prime Minister Mark Carney responded swiftly, saying on X (formerly Twitter), “We have consistently defended Canadian workers and businesses throughout trade negotiations with the United States — and we will continue to do so as we approach the August 1 deadline.”
Letters, Threats, and a Looming Deadline
Canada is not alone. Trump has reportedly sent nearly two dozen letters this week to leaders around the world, outlining the tariff rates their countries will face if new trade deals aren’t finalized by August.
But Canada stands out — it’s the largest trading partner to receive such a letter. With $413 billion in Canadian goods entering the U.S. last year and $349 billion in U.S. exports flowing north, the stakes are high.
NBC News also reported Trump may impose a blanket tariff on all remaining countries without trade agreements: “Whether it’s 15% or 20%, we’ll figure it out,” Trump told “Meet the Press” host Kristen Welker.
A History of On-Again, Off-Again Tariffs
This isn’t the first time Canada has been in Trump’s crosshairs.
Shortly after winning the 2024 election, Trump pledged to impose 25% tariffs on all Canadian and Mexican imports until the flow of fentanyl and undocumented migrants stopped. Those tariffs were paused, then partially implemented in March — but only applied to goods not compliant with the USMCA.
Since then, the back-and-forth has continued. In March, Trump threatened tariffs on Canadian lumber and dairy, citing Canada’s high dairy tariffs. Last month, he warned of new penalties over a digital services tax targeting U.S. tech companies. Canada backed down at the last moment, suspending the tax.
Trump has even joked about annexing Canada as the 51st U.S. state — an idea that’s been met with fierce and repeated rejection by Canadian leaders.
Auto, Steel and Dairy Sectors in the Crosshairs
The new round of potential tariffs would hit key sectors. Canadian steel and aluminum have already faced 50% tariffs, and automobile imports not in compliance with the USMCA currently face 25% duties.
Canada has hit back, imposing retaliatory tariffs on U.S.-made cars, whiskey, sporting goods, and household appliances.
Fentanyl Returns to the Spotlight
Trump once again cited fentanyl trafficking as justification for punishing Canada — despite the fact that Canada accounts for less than 0.2% of fentanyl seized at the U.S. border, according to 2024 federal data.
In his letter, Trump wrote:
“If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment. These Tariffs may be modified, upward or downward, depending on our relationship with your Country.”
Prime Minister Carney countered Thursday night, stating Canada had made “vital progress to stop the scourge of fentanyl in North America.”
Former Prime Minister Justin Trudeau had appointed a Fentanyl Czar earlier this year and launched a new border initiative to track narcotics in and out of Canada.
Political Fallout in Canada
Opposition leader Pierre Poilievre of the Conservative Party condemned the tariffs as “another unjustified attack on Canada’s economy.”
“Canada has long been a trusted ally and partner to the United States,” Poilievre posted on X. “These tariffs hurt both nations.”
What Happens Next?
With a revised deadline of August 1, the clock is ticking. Negotiators from both countries are still pushing to reach a trade deal before the tariffs hit. But if history is any guide, Trump’s threats could change quickly — or escalate even further. Either way, businesses on both sides of the border are bracing for impact.
