President Donald Trump will impose a 35% rate on some products that enter the US from Canada, in a blow to the efforts of Canadian Prime Minister Mark Carney to avoid punitive targets on goods sold to Americans. The new tariff level will come into force on August 1st.
“Fentanil is far from being the only challenge we have with Canada, which has many fares, non-tariff barriers, policies and trade obstacles that generate unsustainable commercial deficits against the United States,” Trump said in a letter to Carney published on Thursday (10).
The announced rate represents an increase over the current 25% tariff on Canadian imports not covered by the US, Canada and Mexico trade agreement, whose products are still exempt from additional tariffs. This exclusion will remain unchanged, according to an employee who spoke on condition of anonymity.
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Trump will also maintain a lower 10% rate on power imports and their highest key rates as metals, said the employee. The situation is still volatile and the legal order was not formalized, the source warned.
This formula would represent a more modest change in trade relations than a 35% general tariff and preserve exceptions to strongly integrated sectors such as the automotive industry.
Still, the letter suggests that Trump intends to intensify, and not reduce, his trade war with the northern neighbor-which he has publicly stated that he should consider becoming the 51st state-despite the furious efforts of Canadian authorities to negotiate an agreement. The US dollar rose 0.6% compared to the Canadian dollar after the charter was published on the president’s social networks.
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Trump’s announcement occurred on the same day he told NBC News that he is considering general rates of 15% to 20% over most business partners, adding that exact levels are still being defined. Currently, the overall fare is 10%.
In the whole, the measures signal that there is no retreat in Trump’s central economic policy, which observed NBC The recent rise in US stocks, even planning higher tariffs on important business partners in the coming weeks.
Futures of American actions fell as the dollar climbed against major currencies during negotiations in Asia. The Canadian dollar led the losses between the G-10 coins, followed by the Australian dollar and the New Zealand, with fears that more trade interruptions could affect global growth.
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The president spent the week sending communications to business partners, informing them of new rates that will come into force on August 1 if they cannot negotiate better terms. Letters to members of the European Union should also be sent soon.
The announcement about Canada came after authorities in Ottawa had already spoken out this week against US plans to impose a 50% import tariff on copper.
“We are waiting for the details of this decision of the White House and the president, but we will fight her, the final point,” said Canada Industry Minister Mélanie Joly, earlier on Thursday.
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The negotiations between US and Canada already gave signs of tension. Last month, Trump temporarily interrupted conversations after Canada decided to impose a digital service tax – an initiative that the Canadian government ended up abandoning.
Although most Canadian exports are protected from Trump’s fares thanks to the USMCA trade agreement, the president imposed a 25% tariff on many products alleging threat from Fentanil. US government data, however, indicate that very little of the highly addictive drug is traced by the US-Canada border. Metals such as steel and aluminum were already subject to a 50%rate.
Trump said he could “consider this letter an adjustment” if Canada collaborated with him to stop the fentanyl flow. But he criticized the Canadian authorities for existing US dairy rates and said the Canadian government “finally retaliated against the United States.”
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