America again dropped a tariff bomb on Canada, President Trump said- 35% duty will be implemented from August 1

The US has announced a 35 percent tariff on goods imported from Canada. US President Donald Trump wrote a letter to Canadian Prime Minister Mark Carney on Thursday (July 10) informing him about the new tariff rates. This tariff will be applicable on Canadian products entering the US from August 1, 2025. Trump has described it as a step taken in response to Canada’s retaliation and ongoing trade barriers. This decision could further strain the decades-old relationship between the two North American countries.

Trump wrote a letter to the Canadian PM

In a letter to the Canadian PM, Trump said, it is a great honor for me that I am sending you this letter, as it reflects the strength and commitment of our trade relationship, and also that the US has agreed that it will continue to work with Canada even if Canada has retaliated economically against the US. As you may recall, the US imposed a 25% tariff on Canada to deal with the fentanyl crisis, in part because Canada has failed to prevent these drugs from entering our country.

Instead of cooperating with the US, Canada retaliated with tariffs, Trump wrote in the letter. Effective August 1, 2025, we will impose a 35% tariff on products shipped from Canada to the US, in addition to all sectoral tariffs. Goods that are routed through other countries to avoid this higher tariff will also be subject to the same tariff. As you know, if Canadian or your country’s companies choose to make or manufacture products in the US, there will be no tariffs, but we will provide the necessary approvals in a prompt, professional and routine manner … in a matter of weeks.

If for any reason you decide to increase your tariffs, the US will add an equivalent amount to the 35% tariff, Trump added. Also, I should mention that the supply of fentanyl is not the only challenge we have with Canada. Canada has a number of tariff and non-tariff policies and trade barriers that create an unsustainable trade deficit with the United States. Canada imposes excessive tariffs of up to 400% on our dairy farmers and our farmers are rarely allowed to sell their produce in Canada. This trade deficit is a major threat to our economy and national security. If Canada cooperates with me in stopping the supply of fentanyl, we may consider possibly amending this letter. These tariffs may be adjusted up or down depending on our relationship with Canada.

It is not clear how the new 35 percent tariff announced by Trump will apply under the USMCA (United States-Mexico-Canada Agreement) agreement implemented in 2020. In the current system, some goods are exempt from duty under this agreement, but a review of this treaty is proposed in 2026.

Trump imposed tariffs on many countries this week

Although Trump has sent letters with such tariffs to many countries this week, Canada has been particularly targeted by Trump. Canada is America’s second largest trading partner (the first is Mexico). In June, Trump halted trade talks with Canada over a digital service tax, which could affect American tech companies. However, when Carney later withdrew this tax, the talks resumed.

Since becoming Prime Minister, Carney has adopted a policy of reducing its dependence on the US and has taken steps towards strengthening relations with the European Union and the United Kingdom. Trump’s tariff policy has been increasingly aggressive and unstable. On Wednesday, he also announced a 50% tariff on Brazil, to which Brazil reacted strongly.