WASHINGTON — U.S. President Donald Trump threatened to impose 35 per cent tariffs on Canadian imports on Aug. 1 in a letter to Prime Minister Mark Carney posted on social media Thursday night.
Canada and the United States had committed to working on a new economic and security agreement with a July 21 deadline for a deal. The boosted tariff pressures call into question progress between the two countries.
In a call with Canadian media from a summit in Malaysia earlier Thursday, Foreign Affairs Minister Anita Anand said she's optimistic about the timeline — but hinted it might not occur by the deadline.
"We are still hopeful that an agreement can be achieved," she said.
Trump has sent correspondence to a handful of countries this week outlining higher tariffs they'll face if they don’t make trade deals by the start of August. Most of the countries — except Brazil — had been bracing for the return of Trump's looming so-called "reciprocal" tariffs this week. Trump pushed the deadline for those duties until Aug. 1 to give more time to negotiate trade deals.
Canada was not subject to those tariffs and it's not clear why Trump sent the letter as the deadline for negotiations had not passed.
In the letter, Trump said if Canada works to stop the flow of fentanyl into the United States he may consider a tariff adjustment.
"I must mention the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers, which cause unsustainable Trade Deficits against the United States," the letter said.
In his correspondence to Carney, Trump pointed to supply management in the dairy sector, repeating his inaccurate claim about Canada putting 400 per cent tariffs on American dairy farmers. The president said the trade deficit with Canada is a threat to the American economy and national security.
Trump declared an emergency at the northern border in order to use the International Economic Emergency Powers Act of 1977, or IEEPA, to slap Canada with 25 per cent tariffs in March, with a lower 10 per cent levy on energy and potash. He partially paused the duties a few days later for imports under the Canada-U.S.-Mexico Agreement on trade.
It is unclear whether there'd be any carve out for imports compliant with the continental trade pact in Trump's latest tariff threats.
There are additional tariffs on steel, aluminum and automobiles, as well as a plan to introduce tariffs on copper, also on Aug. 1.
The letter also pointed out that Canada had responded with retaliatory tariffs against the United States after Trump first imposed the duties. It said if Canada raises its duties, the United States will add an additional 35 per cent.
The increased tariff comes as a new report from a New York-based think tank questioned the drug trafficking rationale of Trump's tariffs on Canada, saying the data shows the vast majority of fentanyl seizures are linked to the southern border.
The Manhattan Institute analyzed newly released data on fentanyl and heroin seizures made in the 50 U.S. states and Washington, D.C., from 2013 to 2024, with a focus on the last two years.
The report released earlier this month found that about 99 per cent of the pills and 97 per cent of the powder were found along the border with Mexico. It found that large fentanyl seizures along the Canadian border were relatively rare.
"The main takeaway is that all indications are that the vast majority of fentanyl consumed in the United States arrived via the southwest border with Mexico," co-author Jonathan Caulkins said Thursday.
"Quantities coming from Canada are negligible."
Canadians have pointed to U.S. Customs and Border Protection data that shows a minuscule volume of fentanyl is seized at the northern border. The RCMP have said there is little to no evidence to support that claim that Canadian fentanyl is spreading in the United States.
The Trump administration has dismissed that justification and has maintained that Canada poses a large fentanyl threat.
The Manhattan Institute report said its analysis "contradicts views — such as those used to justify certain tariffs — that treat the flows across the southern and northern borders as being comparably important."
"Imagine someone who tried to pinch pennies by getting a friend to drive him to the airport whenever he took a luxury cruise. Or imagine a dieter who used artificial sweetener in his coffee whenever he ordered cheesecake for dessert," the report said.
"The U.S. effort to try to solve its fentanyl problem by focusing on the northern border with Canada is similar."
The Manhattan Institute report said that before the United States can act to counter fentanyl trafficking, it must understand how it works. It found that 32 times as much powder and 78 times as many pills were seized in counties along the Mexican border as in those counties sharing the land border with Canada.
Caulkins, a professor at Heinz College at Carnegie Mellon University, said when it comes to fentanyl, Canada and the U.S. "are in the same boat." Both countries are beset by high overdose death rates from synthetic opioids manufactured outside their borders.
— With files from Dylan Robertson in Ottawa
This report by The Canadian Press was first published July 10, 2025.
Kelly Geraldine Malone, The Canadian Press
