The president of the United States, Donald Trump, surpassed Thursday, using his social media account to publish an open letter to Prime Minister Mark Carney, threatening to impose 35 percent tariffs on all Canadian goods from August 1.
In the letter, Trump said that Canada has many tariff and non -tariff policies and commercial barriers against the US, but that he made several statements that have been repeatedly discredited in recent months, leaving more questions than answers about what the announcement means.
Here are five things to know about Trump’s last movement in the commercial war against Canada.
What will the 35 percent rate be applied?
Although Trump’s letter seemed to suggest a general rate of 35 percent over all Canadian imports, a White House official then told the media that these tariffs will probably not affect Canadian imports that comply with the Canada-Mexico (Cusma) agreement.
This means that only the goods that already face 25 percent levies that are not protected under Cusma could be tariffed by 35 percent on August 1. Energy and potassa exports to the US will also remain at 10 percent.
However, the official also warned that Trump has not taken “not final decisions” and “the final document has not yet been written.”
Canada also faces additional world tariffs that the US imposed 50 percent steel and aluminum imports, and in vehicles not built in the US. UU. With 25 percent.
Fen Osler HamSson, Professor of International Affairs at the University of Carleton, said that tariffs on goods that did not comply with USMA represent approximately 14 percent of the total trade between Canada and the United States, “depending on how mathematics is made.”
How much will it cost us?
Mark Warner, main lawyer and trade expert at Maaw Law, said it is difficult to estimate how much the highest rates could cost to Canada, pointing out that this depends on each product, its components, demand level and if the exporter could absorb some of the highest costs.
He gave electronics as an example of a product category under a low level of compliance with Cusma (especially due to its use of Southeast Asia components), which makes them vulnerable to higher tariffs.
“I think what is really costing us more than anything is the problem of uncertainty,” Warner said. “I think the effect on the economy is clear, in commercial decisions, and … in a drag of our growth.”
Small and medium manufacturers will probably be more affected by 35 percent tariffs, HamSson said.
It is not clear how much in the tariff income that the United States has collected from Canada specifically so far this year. But the aggregate numbers of customs and border protection of the USA show that the United States has raised US $ 108.75 billion in total tariffs, taxes and rates this year, as of May 31, more than US $ 88.07 billion raised for 2024.
Trump said Canada financially retaliate against the United States, right?
Canada imposed contrary rates.
This began with the corresponding 25 percent rates of Canada at $ 30 billion in products imported from the US, including items such as alcohol, clothing, orange juice and peanut butter, announced in March.
After the additional tariffs of the United States on steel and Canadian aluminum, and posterior cars, Canada, responded with 25 percent tariffs to more US imports, including steel, aluminum, vehicles that did not comply with USMA, computers, sports equipment and more.
Trump added in yesterday’s letter that in the event that Canada takes reprisals with additional tariffs: “Any number you choose to raise will be added to 35 percent we charge.”
Warner said there are two factors at stake: the political side pressed the Canadian government to retaliate and an economic side that says that more reprisals could damage Canadian consumers.
He is not sure which Path Carney will follow, but said there is still space for negotiation.
Yesterday, Trump also announced 50 percent tariffs on copper imports, but has not yet revealed on what date these levies will enter.
Why does Trump raise fentanyl again?
In his letter, Trump said that tariffs originally imposed themselves on Canada due to the United States fentanyl crisis and Canada’s failure to prevent drugs from entering their country.
“If Canada works with me to stop the Fentanyl flow, perhaps we will consider an adjustment to this letter,” Trump wrote.
Carney responded in X that Canada has made “vital progress” on this front. Earlier this year, the Canadian government appointed a fentanyl tsar and greater border protection to obstruct fentanyl production and trafficking, while indicating that less than one percent of the intercepted fentanyl on the border of the United States comes from Canada.
Throughout the current commercial negotiations with the United States, the Canadian government has firmly defended our workers and businesses. We will continue to do so while we work towards the revised deadline of August 1.
Canada has made vital progress to stop the scourge …
– Mark Carny (@Markjcarney) July 11, 2025
Hampson said it is important to note that Trump declared a national emergency on fentanyl to impose tariffs on Canada, Mexico and China first. To invoke this broad presidential power to justify the rates may not have been legal, as the United States International Court of the United States in May ruled.
In addition, a July report from the Manhattan Institute Expert Group discovered that the great seizures along the border between the United States and Canada were “relatively rare”, questioning “the tariffs and other policies and justifications of policies that deal with the threat of the northern border as comparably severe.”
Warner said Trump is using fentanyl as a “red herring” to get to what he really wants: concessions on trade.
What could happen next?
Both governments have been in conversations on a new economic and security agreement since the beginning of May, with an initial deadline for an agreement before July 21. In response to Trump’s letter, the X Post of Carney said that Canada will work towards the revised deadline on August 1.
Trump seems to be looking for a commercial agreement similar to what the United States negotiated with the United Kingdom in May, establishing a 10 percent reference rate for most imports to the United States, Warner said. He does not believe that the reference rate on Canadian imports is as high as 10 percent, pointing out that there may be other concessions or changes made in the commercial agreement that could affect what level the reference rate is established.
“I think (we are) recognizing that a tariff world is the new normality,” said Hampson. “The critical question now is not whether there are rates, but at what level will be resolved ultimately.”
Hampson said that despite the repeated Trump promises of “90 agreements in 90 days”, very few new agreements have emerged in this period.
“We need to remember that Donald Trump needs trade agreements as much as any other person.”
• Email: slouis@postmedia.com
