Canada Faces 35% US Tariff Starting August 1 Amid Ongoing Trade Negotiations
Canada will face a 35% tariff on its exports to the United States starting August 1, according to a letter sent by US President Donald Trump to Canadian Prime Minister Mark Carney on Thursday. This announcement adds to a series of over 20 similar tariff warnings Trump has issued recently as part of his broader trade dispute with multiple countries.
Canada and the US have been engaged in trade talks aiming to finalize a deal by July 21, but this new tariff threat appears to push the deadline to August 1. Both Canada and Mexico are working to meet US demands to keep the US-Mexico-Canada Agreement (USMCA) trade deal on track.
Prime Minister Carney responded on social media, saying, “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.”
The USMCA, which replaced NAFTA in July 2020 after a renegotiation led by Trump, was scheduled for review next year. However, Trump’s ongoing trade tensions have complicated the process. Initially, tariffs of 25% were imposed on Canadian and Mexican goods, with some exemptions for Canadian energy products.
Trump’s tariff measures are also tied to his concerns over immigration and drug trafficking issues at the borders. While some exemptions have been granted under the USMCA, tensions remain high.
Despite some recent warming in US-Canada relations, including cordial meetings between Trump and Carney earlier this year, the tariff announcement signals ongoing challenges. The two leaders met at the White House in May and at the G7 summit in Canada last month, where other world leaders urged Trump to ease his trade policies.
Additionally, Trump has indicated plans to impose tariffs of 15-20% on other countries that have not yet received tariff letters by August 1. For example, Brazil faces potential tariffs of up to 50% unless negotiations lead to better terms.
Brazilian President Luiz Inácio Lula da Silva has expressed willingness to negotiate with the US, but also warned that Brazil is considering reciprocal measures in response to these tariffs.
As the global trade landscape evolves, Canada, Mexico, and other affected nations continue to seek solutions to avoid further economic disruption.
