Trump increased tariffs for Canada to 35%

US President Donald Trump increased tariffs from 25% to 35% on all Canadian goods not covered by the USMCA trade agreement from August 1.

Goods transported to another country to avoid new tariffs will be subject to a 40% transshipment duty, according to a White House statement.

Washington, Reuters notes, partly attributed this move to Canada’s inability to stop fentanyl smuggling. This is an escalation of the trade war with one of its key trading partners.

Canadian Prime Minister Mark Carney later said he was disappointed with Trump’s decision.

“While we will continue to negotiate with the United States on our trade relationship, the Canadian government is focused on what we can control: strengthening Canada,” he said in a post on X.

Caren added that US duties and tariffs have a significant impact on lumber, steel, aluminum, and automobiles, promising to take measures to protect Canadian jobs, buy local goods, invest in industrial competitiveness, and diversify export markets.

Trump told NBC News on July 31 that he was open to further negotiations with Canada.

Ontario Premier Doug Ford, whose province accounts for about 40% of Canada’s GDP, called on Ottawa to impose a 50% retaliatory tariff on imports of American steel and aluminum.

In June, Carney told the press that if the two countries did not reach a trade agreement by August 1, Canada would likely impose additional retaliatory duties on steel and aluminum exports from the United States.

In May of this year, about 90% of Canadian exports to the US were exempt from duties under the USMCA. Compliance has risen sharply in recent months, with some companies diversifying their supplies to avoid tariffs.

At the same time, the US president agreed to give Mexico 90 days to work on an agreement that would allow it to avoid the 30% tariff he promised to impose on the country from August 1. Mexico will still pay a 25% duty on exports to the US that do not meet USMCA requirements.

In July this year, Canada tightened its tariff quota system on steel imports to soften the blow from US tariffs on its steel industry. The government is also changing its procurement rules and will support the industry’s transition to new business areas.