Trump announced a new 35% tariff on Canadian imports starting August 1st, escalating tensions after Ottawa retaliated against earlier U.S. duties, according to CNBC. In a letter to Canadian Prime Minister Mark Carney, Trump cited fentanyl trafficking as justification and warned the rate could rise further if Canada responds with new tariffs. The new duty is separate from existing sector-specific levies, including a 50% tax on steel, aluminum, and copper, and a 25% tax on autos and other goods. Canada imposed 25% tariffs on select U.S. goods earlier this year and has pledged to maintain them until the U.S. lifts its tariffs on Canadian steel and aluminum. The U.S. had a $62 billion goods trade deficit with Canada in 2024, which rose 9.8% year over year to $25.6 billion in the first five months of 2025.
