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 boundaries
towards the U.S. however made a number of claims which were debunked repeatedly in current months, leaving extra questions than solutions about what the announcement means.
Listed below are 5 issues to find out 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 advised information retailers these tariffs possible gained’t affect Canadian imports which can be compliant underneath the Canada-U.S.-Mexico Settlement (
CUSMA
).
This implies solely items already going through levies of 25 per cent that aren’t protected underneath CUSMA may very well be tariffed by 35 per cent on August 1. Vitality and potash exports to the U.S. will even stay at 10 per cent.
Nonetheless, the official additionally cautioned that Trump has made “no closing choices” and “no closing paper has been drafted” simply but.
Canada additionally faces further 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 complete commerce between Canada and the U.S., “relying on the way you do the mathematics.”
How a lot will it price us?
Mark Warner, principal counsel and commerce knowledgeable at MAAW Legislation, stated it’s troublesome to estimate how a lot the upper tariffs may price Canada, noting that this relies on every product, its parts, degree of demand and whether or not the exporter may take up a few of the greater prices.
He gave electronics for example of a product class underneath a low degree of compliance with CUSMA (particularly on account of their use of parts from Southeast Asia), making them weak to greater tariffs.
“I believe what’s actually costing us greater than something is the difficulty of uncertainty,” Warner stated. “I believe the impact on the economic system is evident, in enterprise choices, and … in a drag on our development.”
Small and medium-sized producers will possible 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 date this yr. However mixture numbers from the U.S. Customs and Border Safety present the U.S. has collected US$108.75 billion in complete duties, taxes and costs this yr, as of Might 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 gadgets akin to alcohol, attire, orange juice and peanut butter, introduced in March.
Following further U.S. tariffs on Canadian metal and aluminum, and later cars, Canada responded with 25 per cent tariffs on extra U.S. imports, together with metal, aluminum, non-CUSMA compliant autos, computer systems, sports activities gear and extra.
Trump added in yesterday’s letter that ought to Canada retaliate with further 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 may damage Canadian shoppers.
He’s not positive what path Carney will pursue, however stated there may be 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 mentioning 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 circulate of Fentanyl, we are going to, maybe, take into account an adjustment to this letter,” Trump wrote.
Carney responded on X that Canada has made “important progress” on this entrance. Earlier this yr, 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’ll proceed to take action as we work in direction of the revised deadline of August 1.
Canada has made important progress to cease the scourge…
— Mark Carney (@MarkJCarney) July 11, 2025
Hampson stated it is very important 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 might not have even been authorized, because the U.S. Courtroom of Worldwide Commerce dominated in Might.
Additionally, a July report from suppose tank Manhattan Institute discovered that giant 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 “purple 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 Might, with an preliminary deadline for an settlement by July 21. In response to Trump’s letter, Carney’s X put up stated Canada will work towards the revised deadline of August 1.
Trump seems to be looking for a commerce deal much like what the U.S. negotiated with the U.Ok. in Might, 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 modifications made to the commerce settlement that would affect what degree the baseline tariff is about at.
“I believe (we’re) recognizing {that a} tariff world is the brand new regular,” stated Hampson. “The crucial query now isn’t whether or not tariffs exist, however at what degree they may finally settle.”
Hampson stated that regardless of Trump’s repeated guarantees of “90 offers in 90 days,” only a few new agreements have really emerged on this interval.
“We have to do not forget that Donald Trump wants commerce offers as a lot as anybody else.”
• E-mail: slouis@postmedia.com
