U.S. President Donald Trump has ignited fresh trade tensions by threatening to impose a 35% tariff on Canadian goods, escalating pressure on Ottawa ahead of a looming July 21 deadline for a new trade and security agreement. The threat, announced in a letter posted on Trump’s Truth Social platform, accompanies plans for additional blanket tariffs of 15% to 20% on most U.S. trade partners.
Trump’s letter accuses Canada of failing to stem the flow of fentanyl into the U.S. and maintaining unfair tariffs on American dairy farmers. He linked the potential tariffs to these issues, suggesting that cooperation on fentanyl could lead to a reduction in levies.
“As you are aware, there will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump stated, implying that the tariffs aim to incentivize domestic U.S. production.
Canadian Prime Minister Mark Carney responded firmly, saying his government would continue to defend Canadian workers and industries. In a post on X (formerly Twitter), Carney emphasized Canada’s efforts in combating fentanyl trafficking, including increased border funding and the appointment of a “fentanyl czar” earlier this year.
Data from U.S. Customs and Border Protection shows that only 0.2% of fentanyl seizures occur at the Canadian border, with the vast majority intercepted at the southern border with Mexico.
Canada exports around 75% of its goods to the U.S., with key sectors including automotive manufacturing and metals like aluminium and copper. Many of these have already been hit by Trump’s broader global tariffs, including a 25% auto tariff and a 50% levy on copper imports effective next month.
Trump’s latest threat adds to a growing list of trade-related ultimatums issued to U.S. partners. He has sent over 20 such letters this week and hinted at similar tariffs for the European Union.
Canada has warned of retaliatory measures if no agreement is reached by the July 21 deadline. Carney recently scrapped a tax on large U.S. tech firms, calling it a strategic move in broader trade negotiations.
With just days left, the standoff threatens to destabilize the vital economic relationship between the two countries.
