Canada aims for new U.S. trade deal by Aug. 1 as Trump threatens 35% tariffs: Carney

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Trump announces 35 per cent tariffs on Canada starting August 1

Donald Trump announced Thursday the U.S. will charge a 35 per cent tariff on Canadian imports starting Aug. 1.

In an open letter to Prime Minister Mark Carney that was posted on Truth Social, the U.S. president wrote “if for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge.”

Trump claimed the tariffs were originally imposed on Canada because of the U.S. fentanyl crisis, which he said were partly due to “Canada’s failure to stop the drugs from pouring into our country.”

“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.”

Late Thursday night, Carney posted on social media that Canada would work towards a revised deadline of Aug. 1 in reaching a new trade deal with the U.S., updating the July 21 deadline set last June during the G7 Leaders’ Summit.

“Canada has made vital progress to stop the scourge of fentanyl in North America,” Carney wrote. “We are committed to continuing to work with the United States to save lives and protect communities in both our countries.”

Trump has repeatedly cited fentanyl as one of the justifications for launching a trade war against Canada. However, a July 1 report from The Manhattan Institute found that large Canadian-border seizures were “relatively rare,” with only one per cent of fentanyl pills, capsules or tablets seized coming from up north.

Trump said there would be no tariffs if Canadian companies decided to “build or manufacture” products in the United States. He also pointed to what he called “unsustainable” trade deficits, as well as the Canadian dairy sector.

Since taking office, Trump has falsely claimed numerous times that Canada imposes anywhere between 250 and 400 per cent tariffs on U.S. dairy products.

Back and forth negotiations

Last month at the G7 in Kananaskis, Alta., Canada set a 30-day trade deal deadline of July 21 with the U.S. However, the two sides cooled off that date.

The U.S. temporarily ended trade talks in late June over Canada’s digital services tax, but the federal government moved to drop the tax just days later and negotiations resumed. Carney said the move to drop the tax was part of a “bigger negotiation” for a final deal with the U.S.

Last week, Pete Hoekstra, the American ambassador to Canada, refused to commit to that date during an interview with CTV News. He also said that an eventual deal, whenever it may come, would be “good” for the two countries.

On Wednesday, Trump announced the U.S. will place a 50 per cent tariff on copper imports effective Aug. 1. The U.S. was Canada’s largest copper importer in 2023, accounting for 52 per cent of the total export value. That same year, Canada’s exports of copper and copper-based products were valued at $9.3 billion.

Speaking with reporters Thursday at the ASEAN Summit in Malaysia, Foreign Affairs Minister Anita Anand said the federal government was “still hopeful” an agreement could be reached by July 21, despite the “complex negotiation.”

“Our teams are working extremely hard behind closed doors,” Anand said. “This is an effort that we are putting all our weight behind.”

David MacNaughton, Canada’s former ambassador to the U.S., said in an interview with CTV News on Thursday the July 21 deadline was “not realistic at the present moment.”

With files from CTV News’ Luca Caruso-Moro, Stephanie Ha, Mike Le Couteur, Spencer van Dyk, Charlie Buckley, Tammy Ibrahimpoor and The Canadian Press.