Trump plans to hike tariffs on Canadian goods to 35%
[July 11, 2025] By
JOSH BOAK
WASHINGTON (AP) — President Donald Trump said in a Thursday letter that
he will raise taxes on many imported goods from Canada to 35%, deepening
a rift between two North American countries that have suffered a
debilitating blow to their decades-old alliance.
The letter to Canadian Prime Minister Mark Carney is an aggressive
increase to the top 25% tariff rates that Trump first imposed in March
after months of threats. Trump's tariffs were allegedly in an effort to
get Canada to crack down on fentanyl smuggling despite the relatively
modest trafficking in the drug from that country. Trump has also
expressed frustration with a trade deficit with Canada that largely
reflects oil purchases by America.
“I must mention that the flow of Fentanyl is hardly the only challenge
we have with Canada, which has many Tariff, and Non-Tariff, Policies and
Trade Barriers,” Trump wrote in the letter.
The higher rates would go into effect Aug. 1, creating a tense series of
weeks ahead for the global economy as recent gains in the S&P 500 stock
index suggest many investors think Trump will ultimately back down on
the increases.
While multiple countries have received tariff letters this week, Canada
— America's second largest trading partner after Mexico — has become
something of a foil to Trump. It has imposed retaliatory tariffs on U.S.
goods and pushed back on the president's taunts of making Canada the
51st state. Mexico has also faced 25% tariffs because of fentanyl, yet
it has not faced the same public pressure from Trump.
Carney was elected prime minister in April on the argument that
Canadians should keep their “elbows up.” He has responded by distancing
Canada from its intertwined relationship with the U.S., seeking to
strengthen its links with the European Union and the United Kingdom.
Hours before Trump's letter, Carney posted on X a picture of himself
with British Prime Minister Keir Starmer, saying, “In the face of global
trade challenges, the world is turning to reliable economic partners
like Canada.” Implied in his statement was that the U.S. has become
unreliable because of Trump's haphazard tariff regime, which has gone
through aggressive threats and reversals.
When Carney went to the White House in May, the public portion of their
meeting was cordial. But Trump said there was nothing the Canadian
leader could tell him to remove the tariffs.
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 “Just the way it is,” Trump said at
the time.
Carney indicated he would be willing to be patient in pursuing talks
on trade.
“There are much bigger forces involved,” the
Canadian leader said. “And this will take some time and some
discussions.”
Trump has sent a series of tariff letters to 23 countries so far.
Those form letters became increasingly personal with Canada as well
as a Wednesday note that put a 50% tariff on Brazil for the ongoing
trial of its former president, Jair Bolsonaro, for trying to stay in
office after his 2022 election loss. Trump was similarly indicted
for his efforts to overturn his 2020 election loss.
The letters reflect the inability of Trump to finalize the dozens of
trade frameworks that he claimed would be easy to negotiate. Shortly
after unveiling his April 2 “Liberation Day” tariffs, a financial
market selloff caused Trump to announce a 90-day negotiating period
during which a 10% baseline tariff would be charged on most imported
goods.
But Trump has indicated that the 10% tariff rates are largely
disappearing as he resets the rates with his letters.
“We’re just going to say all of the remaining countries are going to
pay, whether it’s 20% or 15%,” Trump said in a phone interview with
NBC News.
So far, Trump has announced trade frameworks with the U.K. and
Vietnam, as well as a separate deal with China in order to enable
continued trade talks. Trump jacked up import taxes on Chinese goods
to as much as 145%, but after talks Trump has said China faces total
tariffs of 55%.
In June, Trump said he was suspending trade talks with Canada over
its plans to continue its digital services tax, which would hit U.S.
technology companies. A few days later, talks resumed when Carney
rescinded the tax.
Under the current tariff structure, the 2020 United States Mexico
Canada Agreement has protected eligible goods from Trump's tariffs.
But a review of the pact is scheduled for 2026.
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