Trump threatens new 35pc tax on Canada

Washington: US President Donald Trump has informed Canadian Prime Minister Mark Carney in a letter that a 35 percent import tax will be imposed on Canadian exports from August 1.

According to the AFP news agency, the announcement is the latest in more than 20 such letters sent by Trump to various countries this week, which is a continuation of his threats of a trade war.

Trade talks between Canada and the United States were ongoing to reach an agreement by July 21, but now this new threat is indicating that this deadline will be moved to August 1.

Both Canada and Mexico are trying to appease Trump to some extent so that the free trade, United States-Mexico-Canada Agreement (USMCA), between the three countries can be revived.

Canadian Prime Minister Mark Carney wrote on the social media platform X on Thursday night that the Canadian government has consistently defended its workers and businesses during the ongoing trade negotiations with the United States. We will stand by this position and now move forward under the new deadline of August 1.

Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.

Canada has made vital progress to stop the scourge…

— Mark Carney (@MarkJCarney) July 11, 2025

It is pertinent to note that the ‘USMCA’ agreement was introduced in July 2020 to replace the former ‘NAFTA’ agreement, which was to be renewed in July next year, but Trump has made this process uncertain by waging a trade war after assuming his second term in January.

Initially, the United States had imposed a 25 percent tariff on Canadian and Mexican products, but the Canadian energy sector was kept at a lower rate. Trump argued that these two countries had not done enough to stop illegal immigration and drug smuggling.

Later, Trump exempted many goods imported under the USMCA from the tariff.

The latest letter comes at a time when relations between Trump and Prime Minister Carney have been improving, with Trump repeatedly suggesting that Canada should become the 51st state of the United States.

The Canadian prime minister met Trump in a cordial atmosphere at the White House on May 6, and the two leaders met again last month at the G-7 summit, where other world leaders urged Trump to back off from the trade war.

Canada responded by agreeing to roll back taxes on US technology companies, in return for which Trump agreed to resume trade talks.

On the other hand, in an interview, Trump announced that he was considering imposing a general tariff of 15 to 20 percent on all countries that had not yet received a letter from him by August 1.

If no agreement on better terms could be reached, tariffs of up to 50 percent have been threatened for countries like Brazil.

Brazilian President Lula da Silva said Thursday he was ready to negotiate with the United States, but made it clear that his government was also considering retaliatory measures.

Trump also criticized the treatment of Jair Bolsonaro, an ally of Brazil's former right-wing government, in his letter.