WASHINGTON — President Donald Trump said in a letter that he will raise taxes on many imported goods from Canada to 35%, deepening a rift between two North American countries that have suffered a debilitating blow to their decades-old alliance.
The Thursday letter to Canadian Prime Minister Mark Carney is an aggressive increase to the top 25% tariff rates that Trump first imposed in March after months of threats. Trump's tariffs were allegedly in an effort to get Canada to crack down on fentanyl smuggling despite the relatively modest trafficking in the drug from that country. Trump has also expressed frustration with a trade deficit with Canada that largely reflects oil purchases by America.
"I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers," Trump wrote in the letter.
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Canada's Prime Minister Mark Carney walks with President Donald Trump after a group photo at the G7 Summit, June 16, in Kananaskis, Canada.
The higher rates would go into effect Aug. 1, creating a tense series of weeks ahead for the global economy as recent gains in the S&P 500 stock index suggest many investors think Trump will ultimately back down on the increases. But stock market futures were down early Friday in a sign that Trump's wave of tariff letters may be starting to generate concern among investors.
In a social media post, Carney said Canada would continue to work toward a new trade framework with the U.S. and has made "vital progress to stop the scourge of fentanyl."
"Through the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and business," Carney said.
While multiple countries have received tariff letters this week, Canada — America's second largest trading partner after Mexico — has become something of a foil to Trump. It has imposed retaliatory tariffs on U.S. goods and pushed back on the president's taunts of making Canada the 51st state. Mexico has also faced 25% tariffs because of fentanyl, yet it has not faced the same public pressure from the Republican U.S. president.
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President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, on April 2, in Washington.
A look at the countries that received Trump's tariff letters
President Donald Trump has sent letters this week outlining higher tariffs countries will face if they don't make trade deals with the U.S. by Aug. 1.
Here's a look at the countries that have gotten tariff letters so far — and where things stand now:
Brazil
Tariff rate: 50% starting Aug. 1. Brazil wasn't threatened with an elevated "reciprocal" rate in April — but, like other countries, has faced Trump's 10% baseline over the last three months.
Key exports to the U.S.: Petroleum, iron products, coffee and fruit juice.
Response: In a forceful response, Brazilian President Luiz Inacio Lula da Silva said Trump's tariffs would trigger the country's economic reciprocity law — which allows trade, investment and intellectual property agreements to be suspended against countries that harm Brazil's competitiveness. He also noted that the U.S. has had a trade surplus of more than $410 billion with Brazil over the past 15 years.
Myanmar
Tariff rate: 40% starting Aug. 1. That's down from 44% announced in April.
Key exports to the U.S.: Clothing, leather goods and seafood.
Response: Maj. Gen. Zaw Min Tun, the spokesperson for Myanmar's military government said it will follow up with negotiations.
Laos
Tariff rate: 40% starting Aug. 1. That's down from 48% announced in April.
Key exports to the U.S.: Shoes with textile uppers, wood furniture, electronic components and optical fiber.
Cambodia
Tariff rate: 36% starting Aug. 1. That's down from 49% announced in April.
Key exports to the U.S.: Textiles, clothing, shoes and bicycles.
Response: Cambodia's chief negotiator, Sun Chanthol, said the country successfully got the tariff dropped from the 49% Trump announced in April to 36% and is ready to hold a new round of negotiations. He appealed to investors, especially factory owners, and the country's nearly 1 million garment workers not to panic about the tariff rate announced Monday.
Thailand
Tariff rate: 36% starting Aug. 1. That's the same rate that was announced in April.
Key exports to the U.S.: Computer parts, rubber products and gemstones
Response: Thailand's Deputy Prime Minister Pichai Chunhavajira said Thailand will continue to push for tariff negotiations with the United States. Thailand on Sunday submitted a new proposal that includes opening the Thai market for more American agricultural and industrial products and increasing imports of energy and aircraft.
Bangladesh
Tariff rate: 35% starting Aug. 1. That's down from 37% announced in April.
Key export to the U.S.: Clothing.
Response: Bangladesh's finance adviser Salehuddin Ahmed said Bangladesh hopes to negotiate for a better outcome. There are concerns that additional tariffs would make Bangladesh's garment exports less competitive with countries like Vietnam and India.
Canada
Tariff rate: 35% starting Aug. 1. That's up from 25% imposed in March. Some of Canada's top exports to the U.S. are subject to different industry-specific tariffs.
Key exports to the U.S.: Oil and petroleum products, cars and trucks.
Response: Canadian Prime Minister Mark Carney posted on X early Friday that the government will continue to work toward a trade deal by the new Aug. 1 deadline.
Serbia
Tariff rate: 35% starting Aug. 1. That's down from 37% announced in April.
Key exports to the U.S.: Software and IT services; car tires.
Cranes unload shipping containers from trucks at Jakarta International Container Terminal (JICT) at Tanjung Priok Port in Jakarta, Indonesia, July 9.
Indonesia
Tariff rate: 32% starting Aug. 1. That's the same rate that was announced in April.
Key exports to the U.S.: Palm oil, cocoa butter and semiconductors
Algeria
Tariff rate: 30% starting Aug. 1. That's the same rate that was announced in April.
Key exports to the U.S.: Petroleum, cement and iron products.
Bosnia and Herzegovina
Tariff rate: 30% starting Aug. 1. That's down from 35% announced in April.
Key exports to the U.S.: Weapons and ammunition
Iraq
Tariff rate: 30% starting Aug. 1. That's down from 39% announced in April.
Key exports to the U.S.: Crude oil and petroleum products.
Libya
Tariff rate: 30% starting Aug. 1. That's down from 31% announced in April.
Key exports to the U.S.: Petroleum products.
South Africa
Tariff rate: 30% starting Aug. 1. That's the same rate that was announced in April.
Key exports to the U.S.: Platinum, diamonds, vehicles and auto parts
Response: The office of South African President Cyril Ramaphosa said in a statement that the tariff rates announced by Trump mischaracterized the trade relationship with the U.S., but it would "continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States" after having proposed a trade framework on May 20.
Sri Lanka
Tariff rate: 30% starting Aug. 1. That's down from 44% announced in April.
Key exports to the U.S.: Clothing and rubber products.
Brunei
Tariff rate: 25% starting Aug. 1. That's up from 24% announced in April.
Key exports to the U.S.: Mineral fuels and machinery equipment.
Moldova
Tariff rate: 25% starting Aug. 1. That's down from 31% announced in April.
Key exports to the U.S.: Fruit juice, wine, clothing and plastic products.
Japan
Tariff rate: 25% starting Aug. 1. That's up from 24% announced in April.
Key exports to the U.S.: Autos, auto parts, electronics
Response: Japanese Prime Minister Shigeru Ishiba called the tariff "extremely regrettable" but said he was determined to continue negotiating.
Kazakhstan
Tariff rate: 25% starting Aug. 1. That's down from 27% announced in April.
Key exports to the U.S.: Oil, uranium, ferroalloys and silver.
Malaysia
Tariff rate: 25% starting Aug. 1. That's up from 24% announced in April.
Key exports to the U.S.: Electronics and electrical products.
Response: Malaysia's government said it will pursue talks with the U.S. A cabinet meeting is scheduled for Wednesday.
South Korea
Tariff rate: 25% starting Aug. 1. That's the same rate that was announced in April.
Key exports to the U.S.: Vehicles, machinery and electronics.
Response: South Korea's Trade Ministry said early Tuesday that it will accelerate negotiations with the United States to achieve a deal before the 25% tax goes into effect.
Tunisia
Tariff rate: 25% starting Aug. 1. That's down from 28% announced in April.
Key exports to the U.S.: Animal and vegetable fats, clothing, fruit and nuts.
Philippines
Tariff rate: 20% starting Aug. 1. That's down from 17% announced in April.
Key exports to the U.S.: Electronics and machinery, clothing and gold.
Vehicles for export are parked at a port in Pyeongtaek, South Korea, July 8.
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Carney was elected prime minister in April on the argument that Canadians should keep their "elbows up." He has responded by distancing Canada from its intertwined relationship with the U.S., seeking to strengthen its links with the European Union and the United Kingdom.
Hours before Trump's letter, Carney posted on X a picture of himself with British Prime Minister Keir Starmer, saying, "In the face of global trade challenges, the world is turning to reliable economic partners like Canada." Implied in his statement was that the U.S. has become unreliable because of Trump's haphazard tariff regime, which has gone through aggressive threats and reversals.
When Carney went to the White House in May, the public portion of their meeting was cordial. But Trump said there was nothing the Canadian leader could tell him to remove the tariffs, saying, "Just the way it is."
Daniel Beland, a political science professor at McGill University in Montreal, said Trump's latest move will make it more difficult for Canada and the U.S. to reach a trade deal, Beland said.
"It doesn't mean a new trade deal between Canada and the United States is impossible, but it shows how hard it is for the Canadian government to negotiate with a U.S. president who regularly utters threats and doesn't appear to be a reliable and truthful interlocutor," he said.
Trump has sent a series of tariff letters to 23 countries. Those form letters became increasingly personal with Canada as well as a Wednesday note that put a 50% tariff on Brazil for the ongoing trial of its former President Jair Bolsonaro for trying to stay in office after his 2022 election loss. Trump was similarly indicted for his efforts to overturn his 2020 election loss to Democrat Joe Biden.
Trump administration officials have said that Trump was seeking to isolate its geopolitical rival China with the tariffs, but the latest tariffs have undermined that message. Brazil's largest trading partner is China, not the U.S., and Chinese government officials have framed his import taxes as a form of bullying.
"Sovereign equality and non-interference in internal affairs are important principles of the U.N. Charter and basic norms governing international relations," said Mao Ning, the Chinese Foreign Ministry spokesman. "Tariffs should not be used as a tool for coercion, bullying and interference in the internal affairs of other countries."
The letters reflect the inability of Trump to finalize the dozens of trade frameworks that he claimed would be easy to negotiate. Shortly after unveiling his April 2 "Liberation Day" tariffs, a financial market selloff caused Trump to announce a 90-day negotiating period during which a 10% baseline tariff would be charged on most imported goods.
But Trump has indicated that the 10% tariff rates are largely disappearing as he resets the rates with his letters.
"We're just going to say all of the remaining countries are going to pay, whether it's 20% or 15%," Trump said in a phone interview with NBC News.
Trump has announced trade frameworks with the U.K. and Vietnam, as well as a separate deal with China to enable continued trade talks. Trump jacked up import taxes on Chinese goods to as much as 145%, but after talks he has said China faces total tariffs of 55%.
In June, Trump said he was suspending trade talks with Canada over its plans to continue its digital services tax, which would hit U.S. technology companies. A few days later, talks resumed when Carney rescinded the tax.
Under the current tariff structure, the 2020 United States Mexico Canada Agreement has protected eligible goods from Trump's tariffs. But a review of the pact is scheduled for 2026.
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