Trump Warns of 35% Tariffs on Canadian Goods from August 1
Tensions between the U.S. and Canada are flaring again as Donald Trump threatens new tariffs—this time, a 35% levy on Canadian imports, set to take effect August 1. In a public letter posted on his Truth Social account, the U.S. President escalated pressure on Ottawa, demanding stronger cooperation on fentanyl control and border security, while also raising long-standing grievances over trade deficits and dairy tariffs.
The letter, which comes as Canada races toward a self-imposed July 21 deadline to strike a broader trade and security agreement with the U.S., marks Trump’s latest effort to tighten economic leverage over key trade partners.
Tariffs Tied to Fentanyl and Migration Concerns
Trump cited Canada’s role in fentanyl trafficking and illegal migration as justification for increasing tariffs from the current 25% to 35%. He hinted the rate could shift, stating, “These tariffs may be modified… depending on our relationship with your country.”
Ottawa has strongly contested this narrative. Canadian officials point to their $1.3 billion investment in border security measures announced last December, which includes helicopters, surveillance tech, and new personnel. They also appointed a “fentanyl czar” to combat trafficking. However, a recent Manhattan Institute report argued that fentanyl flowing from Canada plays a minor role in the U.S. opioid crisis, challenging the premise of these new economic penalties.
Exemptions, Uncertainties, and Ongoing Talks
Despite the headline threat, the White House has quietly continued exempting Canadian goods that meet USMCA origin rules from the March-imposed “fentanyl tariffs.” Neither Bloomberg nor the Wall Street Journal expect those exemptions to be lifted—although Trump’s latest letter didn’t reference them.
What’s clear is that this new round of tariffs is separate from Trump’s existing measures targeting steel, aluminum, automobiles, and pharmaceuticals—each of which already affects Canada disproportionately.
In recent days, Trump has sent similar letters to over 20 countries, outlining tariff schedules and warning of penalties unless deals are reached by August 1. Yet Canada’s situation is more complex: it was one of the few nations already facing high tariffs under Trump’s earlier actions.
Dairy Disputes and Trade Deficit Frustrations
Beyond fentanyl, Trump zeroed in on Canada’s supply-managed dairy market, accusing it of imposing “extraordinary” tariffs—up to 400%—on American dairy producers. Although Canada applies over-200% tariffs, these only apply beyond tariff-free quotas agreed in USMCA.
Trump also described the U.S. trade deficit with Canada as a “major threat” to national security, reiterating concerns that have long been at the center of his administration’s trade policy.
Legal Challenges and What Lies Ahead
Notably, the latest tariffs—including the 35% hike—have been authorized under the International Emergency Economic Powers Act (IEEPA). However, a U.S. court recently ruled Trump’s use of IEEPA for tariff measures was illegal. That ruling is currently paused pending appeal, leaving uncertainty around the long-term legality of these economic moves.
In parallel, Trump has continued to ramp up sectoral tariffs—50% on steel and aluminum, 25% on cars, and recently proposed 200% on pharmaceuticals and 50% on copper—all of which heavily affect Canadian exports.
With less than a month to go before the August 1 tariff deadline, all eyes are on whether Canada and the U.S. can strike a deal—or whether another round of cross-border economic strain is inevitable.
Stay tuned to Maple News Wire for the latest on Canada-U.S. trade and diplomacy.
