Trump slashes Canada tariffs in bold 35% surge starting Aug 1
Trump Threatens 35% Canadian Export Tariff
President Donald Trump warned on Thursday that Canada will face a 35 percent tariff on goods sent to the United States beginning August 1. The letter, addressed to Prime Minister Mark Carney, is the latest of more than 20 such threats issued by Trump since the start of his trade war campaign.
Impending Deadline for USMCA Talks
- Canada and the United States are negotiating a trade deal, with a target date of July 21. The new tariff threat appears to jeopardize that deadline.
- Both Canada and Mexico are working to satisfy Trump’s demands so that the United States‑Mexico‑Canada Agreement (USMCA) can return to the negotiating table.
Background: From NAFTA to USMCA
The USMCA replaced the former NAFTA agreement in July 2020 after Trump successfully pushed for a renegotiation during his first term. The agreement was scheduled for review in July of next year, but Trump’s abrupt launch of trade wars has thrown the process into disarray.
Initial Tariff Shock
Canadian and Mexican exporters were hit hard by a 25 percent tariff, with a lower rate applied to Canadian energy. Trump’s accusations focused on his border’s lack of control over illegal immigration and illicit drug trafficking.
Recent Exemptions and Continuing Exclusion
Despite the warming relations between Trump and Carney, the president announced exemptions for many goods entering the U.S. under the USMCA, covering large swaths of products. Nevertheless, the recent letter on Thursday signals a persistent threat to Canada’s trade interests.
Canada and the U.S. Battle Over Trade in a Race to July 21
On May 6, Canada’s Prime Minister slipped into the Oval Office to greet President Trump, setting the tone for a months‑long showdown that could end by July 21. The two leaders pushed a truce at last month’s G7 summit in Canada, urging Trump to abandon a hard‑line tariff war and reconciling taxes that had triggered a U.S. backlash.
Trump Eyes a Broad Tariff on August 1
In a fresh interview with NBC, Trump vowed to impose blanket duties of 15‑20 percent on August 1 on countries that were still waiting for one of his pressure letters. Those letters, which capped Brazil at a staggering 50 percent tariff, could take effect on that day unless the parties reached better terms beforehand.
Trump Targets the EU in a “Today or Tomorrow” Letter
Trump told NBC that the U.S.’s biggest trading partner – a 27‑country European Union – will receive a tariff announcement “today or tomorrow (Friday)”. The move could affect billions of euros worth of goods.
Brazil’s Lula Seeks Negotiations After Trump’s Threat
On Thursday, Brazilian President Luiz Inácio Lula da Silva said he is open to talks with the United States, even as Trump threatened a hard tariff. López reiterated that the Brazilian administration is still evaluating reciprocal measures that could counter U.S. actions.
Trump Criticizes Brazil’s Bolsonaro in the Letter to Lula
In the letter addressed to Lula, Trump criticized the treatment of his right‑wing ally Jair Bolsonaro. The U.S. president’s letter aimed at the Brazilian leader reflects a broader push to reframe the country’s diplomatic posture.
