In a new escalation of trade tensions, US President Donald Trump has sent a formal letter to Canadian Prime Minister Mark Carney, warning of a 35% import tax on Canadian exports beginning August 1. The warning marks a renewed push in Trump’s aggressive trade policy, with similar letters reportedly sent to over 20 countries this week.
The letter follows ongoing US-Canada trade talks, which were initially targeting a July 21 deadline for reaching a deal. However, this latest development appears to push that deadline further, putting pressure on Canada and Mexico to finalize negotiations over the USMCA free trade agreement—a successor to NAFTA.
Prime Minister Carney responded via social media, saying Canada will “stand firm in defending its workers and businesses” and is ready to move forward under the revised August timeline. He emphasized Canada’s commitment to fair trade and its willingness to reach a reasonable deal.
Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.
Canada has made vital progress to stop the scourge…
— Mark Carney (@MarkJCarney) July 11, 2025
The USMCA agreement, first introduced in July 2020, is up for renewal next year. However, Trump’s second term in office has made its future uncertain. He initially imposed a 25% tariff on Canadian and Mexican imports, citing inadequate efforts by both countries on immigration control and drug trafficking. Some Canadian goods were later exempted under the deal.
Interestingly, Trump’s letter comes at a time when his relationship with Carney appeared to be improving. They met in May at the White House and again at the G7 summit, where Trump hinted—jokingly or not—that Canada should become the 51st US state. Meanwhile, Canada had shown willingness to roll back taxes on US tech firms in exchange for resumed trade talks.
Trump also hinted at broader global tariffs, suggesting 15–20% general tariffs on other countries not yet contacted—raising the pressure on nations like Brazil, which could face up to 50% duties. Brazilian President Lula da Silva said he is open to talks but warned of potential retaliation if diplomacy fails.