Trump to Impose 35% Tariff on All Canadian Imports from August 1
On July 10, 2025, U.S. President Donald Trump announced via Truth Social that a 35% import tariff will be imposed on all goods from Canada, effective August 1, 2025. This marks a serious escalation in trade tensions between two of North America’s largest trading partners.
1. Reasons Behind the Tariff
According to Trump’s official letter sent to Canadian Prime Minister Mark Carney, the new tariff aims to retaliate against what he described as “extraordinary” tariffs ranging from 200% to 400% that Canada imposes on U.S. dairy products such as milk, butter, and cheese. He argued that these taxes have severely harmed American farmers.
Additionally, Trump cited Canada’s insufficient cooperation in stopping the illegal flow of fentanyl into the United States via the northern border, despite official data showing Canada’s share in U.S. fentanyl imports is marginal.
2. Threat of Further Tariff Increases
President Trump warned that if Canada retaliates with counter-tariffs, the U.S. would consider increasing the tariff beyond 35%, potentially doubling it. This adds significant uncertainty for North American businesses and supply chains.
3. Previous Measures and Ongoing Trade Disputes
This is not the first instance of trade pressure between the two nations. Since March 2025, the U.S. has imposed a 25% tariff (10% for energy products) on Canadian imports. In response, Canada introduced reciprocal tariffs on approximately $30 billion worth of American goods.
Recently, Canada withdrew plans for a 3% digital services tax targeting U.S. tech companies to reopen trade negotiations before the July 21 deadline set by Washington.
Trump’s July 10 announcement also follows a series of similar letters sent to 23 other countries, with proposed tariffs ranging from 20% to 50%, and additional plans to impose general tariffs of 15%–20% on other partners.
4. Canada’s Response and Strategic Moves
Canada has yet to issue an official reply to the 35% tariff threat. However, senior officials in Ottawa have indicated readiness to introduce immediate retaliatory measures if the U.S. proceeds. At the same time, Canada is pursuing new trade agreements with Southeast Asian nations (ASEAN) to diversify its export markets and reduce reliance on the U.S.
5. Economic and Market Impact
Following the announcement, the Canadian dollar (CAD) dropped by approximately 0.4%, while equity markets showed mixed reactions. Economists warned of potential domestic inflation in Canada if U.S. goods become more expensive under the new tariff regime.
Industries likely to be affected include agriculture, automotive, manufacturing, and retail. Supply chain disruptions are also expected, especially in cross-border logistics.
6. Conclusion
The 35% tariff decision reflects the Trump administration’s renewed focus on “America First” trade policies and will likely reshape the future of U.S.–Canada economic relations. Businesses engaged in international trade—especially in agriculture and manufacturing—are advised to monitor developments closely and explore alternative supply chain options to mitigate risks.
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