TMTPOST -- U.S. President Donald Trump on Thursday announced he will slap Canada with 35% tariffs as Ottawa retaliated on the tariffs the Trump administration imposed for fentanyl trafficking.
Starting August 1, the United States will charge Canada a tariff of 35% of all Canadian imports, separating from all sectoral tariffs, Trump said in his letter to Canadian Prime Minister Carney, according to screenshots posted on his social media platform Truth Social on Thursday.
Trump in the letter claimed the new tariffs, higher than the existing 25% levies on Canadian goods, in part resulted from Ottawa ’ s retaliation. "As you will recall, the United States imposed Tariffs on Canada to deal with our Nation ’ s Fentanyl crisis, which is caused, in part, by Canada ’ s failure to stop the drugs from pouring our Country. Instead of working with the United States, Canada retaliated with its own tariffs" Trump wrote.
Besides the fentanyl issue, Trump noted another challenge his administration with Canada: the trade deficit. Just like his previous letters to heads of U.S. trading partners indicating new tariffs, Trump described the trade deficit as "a major threat " to U.S. economy and national security, which was caused by Canada ’ s tariffs and other trade barriers. Specifically, Trump cited levies on dairy goods.
"Canada charges extraordinary Tariffs to our Dairy farmers--up to 40%-- and that is even assuming our Dairy Farmers even have access to to sell their products to the people of Canada, " said Trump in the letter.
Companies in Canada will be exempted from the new tariffs if they decide to build or manufacture goods in the U.S., according to Trump ’ s letter. "If for any reason you decided to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge," Trump wrote.
At the end of the letter, Trump suggested flexibility, stating if the Canadian government works with his administration to stop the flow of fentanyl, "we will, perhaps, consider an adjustment to this letter." "These Tariffs may be modified, upward or downward, depending on our relationship with your Country," he added.
The announcement highlighted Trump ’ s frustration with trade talks with Canada that just once halted by him and resumed more than a week ago.
Trump on June 27 said he decided to terminated U.S.-Canada trade talks over the Digital Services Tax ( DST ) , which was slammed as a "direct and blatant attack on our country." "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canad, effective immediately," Trump posted on his social media platform Truth Social, suggesting his administration is readying the new tariff rates for Canada. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period," the president said in the post.
Canada ’ s DST was enacted in June 2024 under former Prime Minister Justin Trudeau ’ s government. The legislation levies a 3% tax on digital services revenue over $20 million, and is retroactive to Jan. 1, 2022. Taxable revenue includes those of online marketplaces, digital advertising, social media, and user data — which will primarily affect American Big Tech giants such as Amazon.com, Inc., Apple Inc., Google and Meta Platforms, Inc. These companies have to pay DST equal to 3% of the digital services revenue that they make from Canadian users above C$20 million annually.
Canada ’ s Finance Department on June 30 said the government scraped its digital services taxes on tech firms to support the negotiations on a new economic and security partnership with the U.S. Canadian Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025, the department said in the statement.
