by Washington (AP) In a letter, President Donald Trump announced that he will increase taxes on a number of Canadian imports to 35%, further dividing two North American nations whose decades-old friendship has been severely damaged.
Trump aggressively raised the maximum 25% tariff rates, which he initially slapped in March following months of threats, in a letter to Canadian Prime Minister Mark Carney on Thursday. Despite the comparatively low level of fentanyl trafficking from Canada, Trump’s tariffs were purportedly an attempt to pressure that country to crack down on smuggling. Trump has also voiced his displeasure with Canada’s trade deficit, which is mostly the result of American oil purchases.
Trump stated in the letter, “I must highlight 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.”
Since recent rises in the S&P 500 stock index indicate that many investors believe Trump would eventually back down on the increases, the higher rates, which would take effect on August 1, would create a nervous few weeks for the global economy. However, early Friday saw a decline in stock market futures, suggesting that investors may be beginning to worry about Trump’s barrage of tariff letters.
Carney stated in a social media post that Canada has made significant strides in combating the fentanyl epidemic and will keep working toward a new trade framework with the United States.
“The Canadian government has resolutely defended our workers and business through the current trade negotiations with the United States,” Carney stated.
Canada, America’s second-largest trading partner after Mexico, has become somewhat of a counterbalance to Trump, despite the fact that several other nations have received tariff letters this week. It has responded to the president’s remarks about Canada being the 51st state by enacting retaliatory taxes on American exports. Mexico has also been subject to 25% tariffs due to fentanyl, but the Republican president of the United States has not used the same kind of public pressure.
Carney’s claim that Canadians should remain optimistic helped him win the prime ministership in April. In response, he has distanced Canada from its complex relationship with the United States in an effort to fortify ties with the United Kingdom and the European Union.
Carney shared a photo of himself with British Prime Minister Keir Starmer on X only hours before Trump’s letter, writing, “The world is turning to reliable economic partners like Canada in the face of global trade challenges.” He implied that Trump’s chaotic tariff policy, which has included strong threats and reversals, had made the United States untrustworthy.
The public part of their meeting was friendly when Carney visited the White House in May. However, Trump stated, “Just the way it is,” and that the Canadian leader could not advise him to lift the tariffs.
According to Daniel Beland, a professor of political science at McGill University in Montreal, Trump’s most recent action will make it more challenging for the United States and Canada to negotiate a trade agreement.
Although it doesn’t mean that a new trade agreement between the US and Canada is impossible, he said it does highlight how difficult it is for the Canadian government to engage in negotiations with a US president who frequently makes threats and doesn’t seem like a trustworthy and sincere negotiator.
Twenty-three nations have received a series of tariff letters from Trump. In addition to a Wednesday message that imposed a 50% penalty on Brazil for the current trial of its former president Jair Bolsonaro for attempting to remain in power following his 2022 electoral defeat, those formal letters were more intimate with Canada.Trump was also charged with trying to rescind his defeat to Democrat Joe Biden in the 2020 election.
According to Trump administration officials, the goal of the tariffs was to isolate China, a geopolitical foe, but the most recent levies have contradicted that claim. China, not the United States, is Brazil’s biggest economic partner, and Chinese officials have characterized his import taxes as bullying.
Chinese Foreign Ministry spokesman Mao Ning stated that the U.N. Charter’s fundamental values of sovereign equality and non-interference in domestic matters are crucial. Tariffs shouldn’t be applied as a means of intimidation, coercion, or meddling in other nations’ domestic affairs.
Trump’s failure to complete the dozens of trade deals he said would be simple to negotiate is reflected in the letters. A 90-day negotiating period during which a 10% baseline tariff would be applied to the majority of imported goods was announced by Trump shortly after he unveiled his April 2 Liberation Day tariffs due to a selloff in the financial markets.
However, as he resets the tariffs with his letters, Trump has signaled that the 10% tariff rates are essentially going away.
In a phone interview with NBC News, Trump stated, “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%.”
In order to facilitate further trade negotiations, Trump has announced trade frameworks with the United Kingdom, Vietnam, and China. Trump raised import duties on Chinese goods to as high as 145%, but he later stated that China would be subject to 55% overall tariffs.
Trump announced in June that he was halting trade negotiations with Canada because of its intentions to keep imposing a tax on digital services that would affect American IT firms. After Carney revoked the tax a few days later, negotiations resumed.
The 2020 United States Mexico Canada Agreement has shielded qualified goods from Trump’s tariffs under the present tariff regime. However, a 2026 review of the agreement is planned.
