President Donald Trump announced Thursday the sending of a letter to the government of Canada to notify them of a new 35% tariff on its products exported to the U.S., and has led to a strain in the relationship with Mark Carney. In this breach, Canada has sought support from the European Union and the United Kingdom, and Keir Starmer lent his hand to seek a solution to the new tariff situation. This new tariff involves an additional 25% on top of the higher tariff rates imposed by Donald Trump in March after several months of threats. His intention, according to his statements, was for the Canadian government to take tougher measures to stop the smuggling of fentanyl across their common border, even though statistically there is relatively moderate trafficking of the drug from that country. This new move by the president is in line with his tariff moves in Vietnam, the United Kingdom and China.
Frustration over trade deficit with Canada
In his letter, Trump also expressed his frustration over the trade deficit with Canada, mainly due to its oil purchases: “I should mention that the flow of fentanyl is not the only challenge we have with Canada, which has many tariff and non-tariff policies and trade barriers,” wrote the US president.
In the absence of a new agreement, this tariff will go into effect on August 1, causing a further escalation of nervousness in the global economy, as many investors believe Trump will revert to his usual practice of backtracking after an outrageous announcement.
However, stock market futures were down Friday morning, signaling new concern over Trump’s latest wave of signed letters with additional tariffs on a new group of countries.
In response, Canadian Prime Minister Mark Carney assured that Canada will continue to work toward a new trade framework with its neighbor and reiterated that his country has made “vital progress in stopping the scourge of fentanyl.”
“Throughout the current trade negotiations with the United States, the Canadian government has stood firmly for our workers and businesses,” he added.
Trump’s offensive against Canada
Canada is one of Trump’s favorite targets, despite the fact that several countries have received notice of new tariffs this week. However, the northern neighbor as the second largest trading partner of the United States after Mexico, has resisted bowing to Trump’s aggressive decisions both politically, where he claims he will make it the 51st state of the Union, and economically, where it has become something of a rival to Trump.
On the other hand, Canada also announced reciprocal tariffs on US products. In this context, Carney was elected prime minister in April arguing that Canadians should remain calm. In response, Carney has sought to strengthen his ties with the European Union and the United Kingdom to create a powerful common front that can stand up to Trump’s visceral decisions.
Hours before Trump’s letter, Carney posted on X a photo of himself with British Prime Minister Keir Starmer and said, “In the face of global trade challenges, the world is turning to reliable economic partners like Canada,” hinting that the United States has become unreliable due to Trump’s chaotic tariff regime amid aggressive threats and pushback.
Moreover, when Carney visited the White House in May, the message to the press from both leaders was cordial, but Trump claimed that his Canadian counterpart could not tell him anything to remove the plowed
Moreover, when Carney visited the White House in May, the message to the press from both leaders was cordial, but Trump claimed that his Canadian counterpart could not tell him anything to eliminate tariffs: “That’s just the way it is,” he said.
This week alone, Trump sent tariff letters to 23 countries. Of these, the most personal were against Canada and Brazil, where he announced a 50% tariff because of the ongoing trial of former president Jair Bolsonaro, accused of organizing a coup d’état to maintain power despite his 2022 electoral defeat.
However, Trump administration officials have claimed that the president was seeking to isolate his geopolitical rival, China, with the tariffs. In practice, these tariffs have undermined this message, as Brazil’s largest trading partner is China, not the United States, and thus in some cases such aggressive taxes are seen more as a form of intimidation.
In fact, some experts point out that these intemperate and disqualification-filled announcements “reflect Trump’s inability to concretize the dozens of trade frameworks that, according to him, would be easy to negotiate”.
For the time being, the U.S. has reached renegotiated agreements with the U.K. and Vietnam, as well as a separate agreement with China to facilitate continued trade negotiations. Trump increased import duties on Chinese goods to 145%, but after the talks, he declared that China faces full tariffs of 55%.
The HTS provides complete information on tariffs and prices
In the Harmonized Tariff Schedule web you can find out which products are coming from another country as well as their specific code together with the tariff to be paid. In these contexts you can find out the tariffs to be paid and, in case there are any changes, you can also find out the latest developments.