Trump ramps up trade war as he threatens to double tariffs on most nations
The US president's announcement late on Thursday is the latest example of a sporadic tariff policy that's left investors, trading partners, businesses and everyday Americans alike scrambling to make plans.
It wasn't immediately clear if the new tariffs, set to take effect August 1, would apply to all Canadian goods or if Trump's threat applied only to the limited number of goods on which the United States currently levies tariffs.'Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,' Prime Minister Mark Carney said in a statement to X.'We will continue to do so as we work towards the revised deadline of August 1.'
Meanwhile Brazil, faced with the prospect of a 50% increase of import taxes, has said it will impose retaliatory tariffs on the US if the Trump administration follows through on its pledge.
It comes amid a flurry of letters Trump has sent to world leaders over the past week informing them what rates their goods will be tariffed at come August 1, in the absence of any trade deals. Trump has sent nearly two dozen such letters.But Canada is by far the largest trading partner with the United States to receive a letter from the President this week.
Canada and the US have been in trade talks with the hopes of reaching a deal by July 21.NBC News also reported on Thursday that Trump said remaining US trading partners, that have not yet received trade letters or reached framework agreements, will be charged a blanket tariff rate.
The United States currently imposes a 10% tariff on nearly all foreign goods coming into the country, but Trump on Thursday said he might double that.'We're just going to say all of the remaining countries are going to pay, whether it's 20% or 15%. We'll work that out now,' Trump told NBC News.
It is not clear how the US trading relationship with the UK will be affected, with both countries having signed a trade deal in a bid to reduce some tariffs in June. Canada is the top buyer of US exported goods, importing $349 billion (around £257 billion) worth last year, according to Department of Commerce data.
Tariffing Canadian goods could, therefore, backfire if additional retaliatory tariffs are put in place on American goods. Meanwhile, Canada shipped $413bn (around £300bn) worth of goods to the US last year, the third-highest source of foreign goods.
In Thursday's letter, Trump cited the United States' fentanyl issue as one of his original reasons for imposing tariffs on the country's northern neighbour.
However, according to US federal statistics, Canada is responsible for a minuscule percentage of illegal fentanyl coming into the US.
With only 0.2% of the 21,889 pounds of fentanyl seized by US border authorities in 2024 seized at the Canadian border. 'If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,' Trump wrote.
"These Tariffs may be modified, upward or downward, depending on our relationship with your country."
Canadian Prime Minister Mark Carney responded by saying that Canada had made 'vital progress to stop the scourge of fentanyl in North America'.'We are committed to continuing to work with the United States to save lives and protect communities in both our countries,' he added.
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