Daijiworld Media Network - Washington

Washington, Jul 12: In a dramatic escalation of trade tensions, US President Donald Trump has announced a 35% tariff on Canadian exports to the United States, effective August 1. The move, revealed in a late-night letter to Canadian Prime Minister Mark Carney, has upended ongoing trade negotiations between the two countries.

The new tariff marks a significant increase from the existing 25% levy, although products that comply with the United States-Mexico-Canada Agreement (USMCA) are expected to remain exempt, a US administration official told AFP. Canadian energy exports may still face a lower tariff, but final decisions are pending, the official added.

Speaking to reporters, Trump claimed the letter was "fairly well received" and insisted, “It is what we need. So we'll see what happens.” The announcement comes amid broader moves by Trump to reignite a global trade war, with similar tariff threats issued to over 20 countries in the past week.

Canada and the US had been negotiating in hopes of finalizing a revised trade agreement by July 21. With the sudden tariff hike, the deadline now appears to have shifted to August 1. “Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so,” Carney posted on X.

The USMCA, which replaced NAFTA in 2020, was due for review in July 2026. However, Trump’s return to the White House in January has already disrupted the process, with tariffs reimposed on Canadian and Mexican goods — though with a reduced rate for Canadian energy exports.

Trump has justified the trade measures by accusing Canada and Mexico of failing to curb illegal immigration and the flow of illicit drugs — particularly fentanyl — into the US. However, both US and Canadian data indicate Canada contributes less than 1% to America’s illicit drug supply.

Despite tensions, Trump has granted some exemptions under the USMCA for goods entering the US, softening the blow for several Canadian sectors.

The move comes just months after a seeming thaw in relations, with Carney visiting the White House in May and hosting Trump at last month’s G7 summit in Canada.

Meanwhile, Trump hinted at even broader trade penalties, telling NBC he plans to impose blanket tariffs of 15–20% on nations that have yet to receive similar notices. A letter to the European Union — a major US trading partner — is expected imminently.

Brazil has already been targeted, with Trump threatening tariffs as high as 50% starting August 1. Brazilian President Luiz Inacio Lula da Silva said Thursday he is open to negotiations but warned that Brazil is also exploring retaliatory measures.

In his letter to Lula, Trump also criticized Brazil’s treatment of his right-wing ally and former President Jair Bolsonaro, further adding a political dimension to the escalating trade conflict.