Trump Sets Canada’s Tariff Rate at 35%, May Hit Remaining Countries With 15%-20%

President Donald Trump published a letter to Canada on tariffs on social media Thursday. (Getty Images)

President Donald Trump said the U.S. will increase its tariff rate on Canadian goods to 35% starting next month.

In a letter to Canada’s Prime Minister Mark Carney posted on Trump’s Truth Social account late Thursday, the president said the new rate would start on Aug. 1 and be separate from sector-specific tariffs.

The new 35% rate would only apply to Canadian imports to the U.S. that aren’t covered by the U.S.-Mexico-Canada Agreement, or USMCA, which are currently tariffed at 25%. It doesn’t change the 50% rate on steel and aluminum, the 25% rate on non-USMCA compliant cars and car parts, or the 10% on energy products.

Trump said that any attempt to evade the tariffs through transshipments —sending the goods through third countries—would trigger even higher tariffs. He added that if Canada retaliated by raising tariffs on the U.S., the U.S. would add that number to the 35% rate.

Trump put the current 25% tariffs on Canada and Mexico under an emergency order targeting the flow of fentanyl into the U.S. In his Thursday letter, Trump stated that fentanyl is “hardly the only challenge we have with Canada.” He called the U.S. trade deficit with Canada “unsustainable,” accused Canada of charging “extraordinary” tariffs on American dairy farmers, and suggested that Canada blocks farmers from selling products in its country.

Trump added: “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter. These tariffs may be modified, upward or downward, depending on our relationship with your Country.”

Carney wrote on X that Canada has made “vital progress to stop the scourge of fentanyl in North America,” it is committed to working with the U.S., and will continue negotiations ahead of the new deadline of Aug. 1.

The move against Canada is the latest salvo in a busy week for Trump’s tariffs agenda. The president has informed about 20 countries what their new tax rates would be if no alternative arrangements were reached by the end of the month. Most are roughly in line with what was announced in April.

One exception is Brazil, which faces a higher, 50% rate. The president said the rate was “Due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans” in his letter sent earlier this week. The letter criticized the country’s treatment of its former President Jair Bolsonaro, who is facing trial for allegedly attempting a coup. Trump called it a “witch hunt that should end immediately!”

15% to 20% Rates for Remaining Countries

Countries that hadn’t received letters will face 15%-20% tariffs, a higher rate than the current 10% blanket tariffs on goods.

“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump told NBC News late Thursday.

Europe Deal Near Finish

An outline of a trade deal with the European Union is close to being finished, a spokesman for the bloc said Friday, according to a report from The Wall Street Journal. The EU deal will be important, since the 27-nation bloc trades even more with the U.S. than China.

“We remain on our side fully locked and loaded to conclude an agreement-in-principle with the U.S.,” the EU spokesman said. He said he had no update on timing, adding, “We await some indication from our American counterparts that they are ready to do the same.”

Write to Brian Swint at brian.swint@barrons.com and Anita Hamilton at anita.hamilton@barrons.com