WASHINGTON — 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.
“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.
