Trump plans to hike tariffs on Canadian goods to 35%

WASHINGTON (AP) — President Donald Trump said in a Thursday letter that he will raise taxes on 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 25% tariff first announced by Trump in February, allegedly in an effort to get Canada to crackdown on fentanyl smuggling despite the relatively modest trafficking in the drug. The higher rates would go into effect Aug. 1.

“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.

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.

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.

Trump has sent a series of tariff letters to several countries that became increasingly personal in recent versions, including 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.

In June, Trump said he was suspending trade talks with Canada over its plans to continue its digital services tax, which would hit U.S. technology companies. A few days later, talks resumed when Carney rescinded the tax.

It was unclear from Trump’s Thursday letter how the higher tariffs would interact with the 2020 United States Mexico Canada Agreement that Trump negotiated. Under the current tariff regime, the USMCA protected eligible goods. But a review of the pact is scheduled for 2026.