President Donald Trump has launched a fresh assault on global trading partners with Canada likely to be among the worst hit.
In a letter sent to its northern neighbor late on Thursday, Trump said the U.S. will impose a 35% tariff on the country at the start of next month.
Canada is the second-largest U.S. trading partner after Mexico, and the largest buyer of U.S. exports.
According to the Financial Times, a U.S. government official said the tariffs on Canada would “likely” be waived for goods that complied with the terms of Trump’s 2020 trade agreement with Canada and Mexico, but said “no final decisions” had been made. Such a move could blunt the impact of the higher tariff.
The Canadian dollar slid 0.6% against the U.S. dollar before recovering to trade 0.22% down.
In a statement on X, Canadian Prime Minister Mark Carney responded: “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.”
Trump alleged in his letter that the flow of fentanyl from Canada was one reason for the tariff hike. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote.
Carney responded, “Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries.”
In late June, Carney scrapped a tax on big U.S. technology firms after Trump said it was a “blatant attack” and threatened to call off trade talks. The Canadian leader said the tax was dropped as “part of a bigger negotiation” on trade between the two countries.
Earlier on Thursday, Trump told NBC News that EU nations should expect a tariff announcement targeting the bloc “today or tomorrow.” Countries that had not received a letter from him would face tariffs of 15-20%.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump said.
Trump’s “reciprocal” tariffs are currently set at 10%.
The U.S. administration revealed Thursday that Trump had recently sent letters to a further 23 countries threatening tariffs.
He plans tariffs of 30% on Algeria, 25% on Brunei, 30% on Iraq, 30% on Libya, 25% on Moldova, 20% on the Philippines, and 30% on Sri Lanka.
Brazil faces a 50% tariff, in part as a response to the trial of its former president Jair Bolsonaro.