As the Trump administration eyes blanket tariffs of 15% to 20% of most trading partners, Canada is being targeted for one that’s quite a bit higher.
What happened: On Thursday, President Donald Trump threatened to impose a tariff of 35% on Canadian goods from August 1 unless a new trade deal is struck. The administration has already imposed a 50% tariff on steel and aluminum, and one of 25% on certain vehicles.
- The tariffs would likely only apply to goods outside the United States-Mexico-Canada Agreement (USMCA), which are currently tariffed at 25%, a U.S. official told the Globe and Mail.
- The president blames Canada for not doing enough to stop the flow of fentanyl (Canadian officials say hardly any is going over the border) and creating trade deficits.
Why it matters: Around three-quarters of Canada’s exports go to the U.S., but most fall under the USMCA. A lower 10% tariff is also expected to apply on some energy-related imports. Still, the new directive shows Trump is committed to ramping up trade pressure.
Big picture: The situation is still developing, and no formal legally binding order has been issued yet. Trump’s tariff proposals have been known to change, sometimes even shortly before a deadline. On Friday, Trump said Canadian officials had reached out to his team.