The United States will increase tariffs on Canadian goods to 35 per cent starting Friday, making good on President Donald Trump's threat made weeks ago amid trade negotiations between the two countries.
In a statement, the White House said that “Canada has failed to co-operate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the President’s actions to address this unusual and extraordinary threat to the United States.”
These tariffs will not impact goods protected under the existing Canada-United States-Mexico Agreement.
It's important to note that Canada has already taken significant action to curb the trafficking of drugs, including appointing a "Fentanyl Czar," spending $1.3 billion in new border security measures and launching a joint Canada-U.S. "strike force" to deal with organized crime, drug trafficking and money laundering.
Less than one per cent of fentanyl and illegal crossings into the U.S. come from Canada.
The decision comes after Trump warned that Canada’s decision to recognize Palestinian statehood could impact negotiations.
“That will make it very hard for us to make a Trade Deal with them,” the president wrote on Truth Social Thursday, just hours after Prime Minister Mark Carney said his “intention” is to follow in France’s footsteps at the UN General Assembly in New York in September.
Later in the day, the president clarified that while he “didn’t like what they said,” the policy was “not a deal-breaker.”
Negotiators have been hunkering down in Washington this week in hopes of securing a trade deal by Friday, the date by which Trump had threatened to increase tariffs. Carney has spent the last few weeks tempering expectations and acknowledging that a trade deal between the U.S. and Canada may not happen in time.
A 50 per cent levy on some copper imports to the U.S. is also expected to kick in on Friday.
In another executive order, the White House altered its across-the-board tariff rates for dozens of countries.
While a small handful of countries have secured pacts with the United States, those in North America have not been among them. The White House has, however, deferred heightened tariffs for Mexico for 90 days as work continues to strike a new trade deal.
It’s unclear if Canada will impose further retaliatory tariffs on the United States in response. Carney had previously said that if a deal wasn’t reached by July 21 — the deadline the pair had first agreed to during the G7 Summit — Canada would adjust their existing counter-tariffs on steel and aluminum, matching the U.S.' 50 per cent levy.
But Carney has not repeated this pledge since that timeline was extended to Aug. 1, and Trump has made it clear that any further action by the government would spark higher tariffs.
