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President Donald Trump has threatened to impose a 35 percent tariff on Canadian goods unless Canada takes stronger action to combat fentanyl trafficking, according to a letter sent Thursday to Canadian Prime Minister Mark Carney.
The proposed tariffs, set to take effect Aug. 1, would mark a sharp escalation in trade tensions between the two countries. Trump has spent the week notifying several nations of upcoming tariff rates through formal letters, part of a broader pressure campaign aimed at renegotiating trade and enforcement deals.
In his letter, Trump accused Canada of failing to adequately address the illegal flow of fentanyl into the United States via the northern border. He linked the new trade penalty directly to the country’s role in the U.S. opioid crisis.
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote. “These Tariffs may be modified, upward or downward, depending on our relationship with your Country.”
The United States previously announced a 25 percent tariff on Canadian imports, but implementation was postponed during ongoing negotiations. The new 35 percent tariff represents a significant increase and will move forward absent new cooperation from Canadian authorities.
It remains unclear whether goods covered under the United States-Mexico-Canada Agreement (USMCA), signed in 2020, will be exempt from the upcoming tariffs.
The move comes after Trump announced last month that the U.S. would suspend enforcement of a digital services tax on U.S. technology companies. This move prompted the Trump administration to agree to resume stalled trade negotiations later this month.
The Canadian government said the decision to halt the tax, which was set to take effect Monday, was made “in anticipation of a mutually beneficial comprehensive trade arrangement with the United States.”
Prime Minister Mark Carney informed the Trump administration of the suspension, and both countries plan to resume formal trade talks around July 21, according to officials from both sides.
Trump earlier called Canada’s tax an “attack” on the United States and ordered a freeze on trade negotiations to pressure Ottawa to back down.
“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” Trump posted to Truth Social.