Former U.S. President Donald Trump has announced plans to hike tariffs on a broad range of Canadian imports to 35%, significantly escalating tensions between the two long-time allies. The move, disclosed in a letter sent Thursday to Canadian Prime Minister Mark Carney, marks a sharp jump from the existing 25% tariffs that Trump introduced in March following months of threats. While Trump initially framed the tariffs as a way to pressure Canada into tightening controls on fentanyl trafficking, despite relatively low levels of such activity from Canada, he has also voiced frustration over a trade imbalance, primarily due to U.S. oil imports.
“I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many tariff and non-tariff policies and trade barriers,” Trump wrote in the letter.
The new tariff rates are set to take effect on August 1, stirring anxiety in global markets. Though recent gains in the S&P 500 suggest investors hope Trump might backtrack, U.S. stock futures dipped early Friday, indicating growing unease over the former president’s increasingly aggressive trade policies.
In response, Prime Minister Carney emphasized Canada’s continued efforts to negotiate a stable trade environment with the U.S., while also highlighting progress made on drug enforcement:
“Through the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” Carney said in a social media post, adding that Canada has made “vital progress to stop the scourge of fentanyl.”
Although Trump has issued similar tariff warnings to over 20 other countries, his stance on Canada has been particularly forceful. Ottawa has responded with retaliatory tariffs and resisted Trump’s provocative remarks suggesting Canada could become the “51st state.” While Mexico has also faced 25% tariffs over fentanyl concerns, it hasn’t received the same level of public rebuke from Trump.
Carney, who became prime minister in April on a platform urging Canadians to keep their "elbows up," has moved to reduce Canada's dependence on the U.S. by strengthening ties with Europe and the U.K.
Just before Trump's letter was delivered, Carney posted a photo with British Prime Minister Keir Starmer on social media, stating:
"In the face of global trade challenges, the world is turning to reliable economic partners like Canada."
His remark subtly suggested that the U.S. had become an unreliable partner under Trump's shifting tariff agenda.
Despite a cordial photo-op during Carney's May visit to the White House, Trump made it clear that he wasn't open to become:
"Just the way it is," he said when asked if anything could convince him to lift the tariffs.
According to Daniel Béland, a political science professor at McGill University:
“It doesn’t mean a new trade deal between Canada and the United States is impossible, but it shows how hard it is for the Canadian government to negotiate with a U.S. president who regularly utters threats and doesn’t appear to be a reliable and truthful interlocutor.”
Trump’s letters have also targeted other countries. In a particularly pointed message this week, Brazil was hit with a 50% tariff, seemingly tied to the trial of former president Jair Bolsonaro over his alleged attempt to remain in office after losing the 2022 election—a situation echoing Trump’s own legal troubles.
Although Trump once positioned his tariff strategy as a way to isolate China economically, critics argue that the broad application of tariffs has diluted that goal. For instance, Brazil’s top trading partner is China, not the U.S., prompting a sharp rebuke from Beijing:
“Sovereign equality and non-interference in internal affairs are important principles of the U.N. Charter and basic norms governing international relations,” said Mao Ning, spokesperson for China’s Foreign Ministry. “Tariffs should not be used as a tool for coercion, bullying, and interference in the internal affairs of other countries.”
The barrage of tariff announcements also underscores Trump's failure to deliver the new trade deals he had promised would be simple to secure. After launching his "Liberation Day" tariffs on April 2, a market sell-off forced Trump to introduce a 90-day negotiating window with a reduced 10% baseline tariff.
But in a recent interview, Trump indicated that temporary relief may be over:
"We're just going to say all of the remaining countries are going to pay, whether it's 20% or 15%," he told BBC News.
Though he's touted deals with the U.K., Vietnam, and even China, where tariffs were briefly raised to 145% before being reduced to 55%, many of Trump's trade frameworks remain incomplete.
In June, Trump paused trade talks with Canada over its planned digital services tax targeting American tech firms. The discussions resumed only after Carney scrapped the tax.
While the 2020 United State-Mexico-Canada Agreement (USMCA) currently shields qualifying goods from tariffs, that agreement is scheduled for review in 2026, potentially placing it in the crosshairs of Trump's evolving trade strategy.
