Carney vows to defend Canadian workers as August 1 deadline looms
U.S. President Donald Trump has announced a sweeping 35% tariff on all Canadian imports, effective August 1, deepening a trade standoff between the two countries just weeks after talks resumed.
In a letter addressed to Canadian Prime Minister Mark Carney and posted on Trump’s Truth Social account, the former president justified the tariff hike by citing Canada’s alleged failure to stop the flow of fentanyl into the United States. Trump also criticised Ottawa for retaliatory duties imposed earlier this year and warned that any further countermeasures would trigger additional penalties.
“If for any reason you decide to raise your Tariffs,” Trump wrote, “then, whatever the number you choose to raise them by, will be added onto the 35% that we charge.”
The letter also included a veiled offer: “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter.”
Canadian response and calls for stability
Prime Minister Carney responded late Thursday with a post on X, saying Canada had “made vital progress to stop the scourge of fentanyl in North America” and reaffirmed that his government “has steadfastly defended our workers and businesses.” He added that Canada remained committed to working with the U.S. ahead of the revised August 1 deadline.
The Canadian government had previously imposed 25% retaliatory tariffs on a range of U.S. goods—including steel, aluminum, vehicles, computers, apparel, and food—in response to earlier U.S. duties. Canada’s position is that those countermeasures will remain until Washington lifts its own tariffs on Canadian metals.
Foreign Minister Anita Anand, speaking earlier Thursday, had expressed hope that the two countries could finalise a new economic and security agreement by July 21, the target date for ongoing negotiations.
Scope of the tariffs and potential carveouts
The 35% tariff is expected to apply broadly but may exclude certain sectors already subject to separate duties. Canadian steel and aluminum currently face a 50% tariff, autos are taxed at 25%, and copper imports are set to face a new 50% duty from August 1.
Goods that comply with the United States-Mexico-Canada Agreement (USMCA) may remain exempt, as might some key Canadian exports such as crude oil and potash—a fertiliser widely used by American farmers. These products currently face a lower 10% levy.
Fentanyl, trade deficits, and political undertones
While Trump continues to justify the tariffs as a response to fentanyl trafficking, data from U.S. Customs and Border Protection shows that just 43 pounds were seized at the northern border in all of 2024, with 58 pounds intercepted so far this year—relatively modest compared to quantities trafficked through the southern border.
In the letter, Trump also complained of “Tariff, and Non-Tariff, Policies and Trade Barriers” from Canada, blaming them for an “unsustainable Trade Deficit” that he framed as a national security threat. U.S. goods trade with Canada totalled US$761.8bn in 2024, with a US$62bn U.S. deficit. That figure rose nearly 10% year-on-year in the first five months of 2025.
The tariff move follows Trump’s earlier threat to abandon all trade discussions over Canada’s now-revoked digital services tax on U.S. tech companies. Carney had repealed the measure in June to allow talks to restart.
Carney, elected in April on a platform of assertive diplomacy, has begun seeking closer economic ties with the UK and EU. Just hours before Trump’s letter, he posted a photo with British Prime Minister Keir Starmer, declaring that “the world is turning to reliable economic partners like Canada”—a not-so-subtle swipe at the U.S.
Broader tariff push and global impact
Canada is one of 23 countries to receive tariff letters from Trump in recent days, with similar notices sent to Brazil, South Korea, and others. Trump said this week he intends to impose blanket tariffs of 15–20% on most trade partners, up from the current 10%, while some countries like China face rates as high as 145% on certain goods.
Markets, which had initially shrugged off tariff threats, reacted more cautiously following the 35% Canada announcement. Futures for the S&P 500 and other major indexes dipped early Friday as investors began reassessing the implications of escalating trade conflict.
Uncertain outlook
With just weeks remaining before the August 1 deadline, it remains unclear whether the two North American partners can reach a resolution—or if Trump will follow through on his threat to further raise tariffs should Canada retaliate again.
“It doesn’t mean a new trade deal is impossible,” said Daniel Béland, a political science professor at McGill University. “But it shows how hard it is for the Canadian government to negotiate with a U.S. president who regularly utters threats and doesn’t appear to be a reliable and truthful interlocutor.”
