U.S. President
Donald Trump
one-upped himself on Thursday, utilizing his social media account to launch an open letter to Prime Minister
Mark Carney
threatening to impose
tariffs of 35 per cent
on all Canadian items beginning August 1.
Within the letter, Trump stated Canada has many tariff and non-tariff insurance policies and
commerce obstacles
towards the U.S. however made a number of claims which have been debunked repeatedly in current months, leaving extra questions than solutions about what the announcement means.
Listed below are 5 issues to learn about Trump’s newest transfer within the
commerce warfare
towards Canada.
What’s going to the 35 per cent tariff apply to?
Though Trump’s letter appeared to recommend a 35 per cent blanket tariff on all Canadian imports, a White Home official later informed information shops these tariffs probably received’t influence Canadian imports which are compliant underneath the Canada-U.S.-Mexico Settlement (
CUSMA
).
This implies solely items already dealing with levies of 25 per cent that aren’t protected underneath CUSMA may very well be tariffed by 35 per cent on August 1. Power and potash exports to the U.S. may also stay at 10 per cent.
Nonetheless, the official additionally cautioned that Trump has made “no last selections” and “no last paper has been drafted” simply but.
Canada additionally faces extra international tariffs the U.S. imposed on metal and aluminum imports at 50 per cent, and on autos not constructed within the U.S. at 25 per cent.
Fen Osler Hampson, professor of worldwide affairs at Carleton College, stated tariffs on non-CUSMA compliant items account for about 14 per cent of whole commerce between Canada and the U.S., “relying on the way you do the mathematics.”
How a lot will it value us?
Mark Warner, principal counsel and commerce professional at MAAW Legislation, stated it’s tough to estimate how a lot the upper tariffs might value Canada, noting that this is dependent upon every product, its parts, degree of demand and whether or not the exporter may soak up a number of the increased prices.
He gave electronics for example of a product class underneath a low degree of compliance with CUSMA (particularly as a result of their use of parts from Southeast Asia), making them weak to increased tariffs.
“I feel what’s actually costing us greater than something is the difficulty of uncertainty,” Warner stated. “I feel the impact on the financial system is evident, in enterprise selections, and … in a drag on our progress.”
Small and medium-sized producers will probably be most impacted by 35 per cent tariffs, Hampson stated.
It’s unclear how a lot in tariff income the U.S. has collected from Canada particularly to this point this 12 months. However mixture numbers from the U.S. Customs and Border Safety present the U.S. has collected US$108.75 billion in whole duties, taxes and charges this 12 months, as of Could 31 — already greater than the US$88.07 billion collected all through 2024.
Trump stated Canada financially retaliated towards the U.S. Have we?
Canada did impose counter tariffs.
This started with Canada’s matching 25 per cent tariffs on $30 billion in items imported from the U.S., together with objects similar to alcohol, attire, orange juice and peanut butter, introduced in March.
Following extra U.S. tariffs on Canadian metal and aluminum, and later vehicles, Canada responded with 25 per cent tariffs on extra U.S. imports, together with metal, aluminum, non-CUSMA compliant autos, computer systems, sports activities tools and extra.
Trump added in yesterday’s letter that ought to Canada retaliate with extra tariffs, “No matter quantity you select to boost them by might be added onto the 35 per cent that we cost.”
Warner stated there are two components at play: the political aspect placing strain on the Canadian authorities to retaliate and an financial aspect which says additional retaliation might damage Canadian customers.
He’s not positive what path Carney will pursue, however stated there’s nonetheless room for negotiation.
Yesterday, Trump additionally introduced 50 per cent tariffs on copper imports however has not but revealed at what date these levies will kick in.
Why is Trump citing fentanyl once more?
In his letter, Trump claimed tariffs have been initially imposed on Canada due to the U.S. fentanyl disaster and Canada’s failure to cease medicine from coming into their nation.
“If Canada works with me to cease the circulation of Fentanyl, we’ll, maybe, take into account an adjustment to this letter,” Trump wrote.
Carney responded on X that Canada has made “very important progress” on this entrance. Earlier this 12 months, the Canadian authorities appointed a fentanyl czar and elevated border safety to hinder fentanyl manufacturing and trafficking, whereas additionally noting that lower than one per cent of the fentanyl intercepted on the U.S. border comes from Canada.
All through the present commerce negotiations with america, the Canadian authorities has steadfastly defended our staff and companies. We are going to proceed to take action as we work in the direction of the revised deadline of August 1.
Canada has made very important progress to cease the scourge…
— Mark Carney (@MarkJCarney) July 11, 2025
Hampson stated you will need to spotlight that Trump declared a nationwide emergency over fentanyl with a view to impose tariffs on Canada, Mexico and China within the first place. Invoking this sweeping presidential energy to justify tariffs could not have even been authorized, because the U.S. Court docket of Worldwide Commerce dominated in Could.
Additionally, a July report from suppose tank Manhattan Institute discovered that enormous seizures alongside the U.S.-Canada border have been “comparatively uncommon,” calling into query “tariffs and different insurance policies and coverage justifications that deal with the menace from the northern border as comparably extreme.”
Warner stated Trump is utilizing fentanyl as a “crimson herring” to get at what he actually needs: concessions on commerce.
What may occur subsequent?
Each governments have been in talks over a brand new safety and financial deal since early Could, with an preliminary deadline for an settlement by July 21. In response to Trump’s letter, Carney’s X submit stated Canada will work towards the revised deadline of August 1.
Trump seems to be in search of a commerce deal much like what the U.S. negotiated with the U.Okay. in Could, establishing a ten per cent baseline tariff on most imports to the U.S., Warner stated. He doesn’t suppose the baseline tariff on Canadian imports might be as excessive as 10 per cent, noting there could also be different concessions or adjustments made to the commerce settlement that might influence what degree the baseline tariff is ready at.
“I feel (we’re) recognizing {that a} tariff world is the brand new regular,” stated Hampson. “The vital query now is just not whether or not tariffs exist, however at what degree they may finally settle.”
Trump’s new tariff menace hikes uncertainty for Canadian companies
Trump says U.S. will impose 35% tariff on Canadian items beginning August 1
Hampson stated that regardless of Trump’s repeated guarantees of “90 offers in 90 days,” only a few new agreements have truly emerged on this interval.
“We have to keep in mind that Donald Trump wants commerce offers as a lot as anybody else.”
• E-mail: slouis@postmedia.com
