Associated Press, by Josh Boak
WASHINGTON (AP) – President Donald Trump said he’s deepened a rift between two North American countries that suffered a debilitating blow to the alliance several decades ago in a letter that wrote that he would raise taxes to 35% on many imports from Canada.
Thursday’s letter to Canadian Prime Minister Mark Kearney is an aggressive rise against the top 25% tariff rates Trump first imposed in March after months of threat. Trump’s tariffs are said to be working hard to ensure Canada cracks down on fentanyl smuggling despite relatively modest human trafficking of drugs from the country. Trump has also expressed his dissatisfaction with the trade deficit with Canada, which is a major reflection of the US’s oil purchases.
“We must mention that the fentanyl flow is not the only challenge with Canada, which has many tariffs and non-tariffs, policy and trade barriers,” Trump wrote in the letter.
The higher rates will take effect on August 1, creating a strained series weeks ahead for the global economy, as recent profits suggest. But stock market futures had fallen early on Friday with signs that a wave of Trump’s tariff letters could be beginning to generate concern among investors.
In a social media post, Carney said Canada will continue to work towards a new trade framework with the US, saying “we have made significant progress in stopping the fentanyl tragedy.”
“Through current trade negotiations with the US, the Canadian government has firmly defended our workers and businesses,” Carney said.
Several countries have received tariff letters this week, but Canada, America’s second-largest trading partner after Mexico, has become a focal point for Trump. He was pushed back by the president’s provocation of retaliating tariffs on US goods and making Canada a 51st state. Mexico is also facing 25% tariffs for fentanyl, but not facing the same public pressure from the Republican US president.
Kearney was elected prime minister in April over a debate that Canadians should “stoop their elbows” and keep them. He responded by distancing Canada from its US relations, calling for a stronger connection between the European Union and the UK.
Hours before Trump’s letter, Carney posted a photo of himself with British Prime Minister Kiel Starmer on X, saying, “Facing with the challenges of world trade, the world is turning to trustworthy economic partners like Canada.” What was hinted in his statement was that the US was unreliable due to Trump’s accidental tariff regime, which experienced an offensive threat and a reversal.
When Carney went to the White House in May, the public part of their meeting was heartfelt. But Trump said there’s nothing Canadian leader could tell him to remove tariffs.
Daniel Beland, a political science professor at McGill University in Montreal, said Trump’s latest move would make it more difficult for Canada and the US to reach a trade deal.
“That doesn’t mean that a new trade agreement between Canada and the United States is impossible, but it shows how difficult it is for Canadian government to negotiate with a US president who regularly poses threats and appears not to be a reliable and true interlocutor,” he said.
Trump sent a series of tariff letters to 23 countries. These form letters have become increasingly personal as in Canada, with Wednesday’s memo giving Brazil a 50% tariff for the ongoing trial of former President Jia Bolsonaro after the 2022 election defeat. Trump was similarly charged with efforts to overturn Democrat Joe Biden’s 2020 election defeat.
Trump administration officials said Trump is trying to isolate its geopolitical rival China through tariffs, but the latest tariffs have undermined that message. Brazil’s biggest trading partner is China, not the United States, and Chinese government officials frame his import tax as a form of bullying.
“Sovereign equality and non-interference in international relations are key principles of the UN Charter and the fundamental norms governing international relations,” said Mao Ning, a spokesman for China’s Ministry of Foreign Affairs. “Taxes should not be used as a tool for coercion, bullying or interference in the internal affairs of other countries.”
The letter reflects the inability to finalise dozens of trade frameworks Trump claimed to be easy to negotiate. Shortly after the announcement of the “liberation day” tariffs on April 2, Trump announced a 90-day negotiation period due to the sale of financial markets. During this period, most imports will be charged a 10% baseline fee.
But Trump shows that the 10% tariff rate is largely gone as he resets the fees in his letter.
“The rest of the countries are just saying they’re going to pay, whether it’s 20% or 15%,” Trump said in a phone interview with NBC News.
Trump has announced a trade framework between the UK and Vietnam and has announced another contract with China to allow for ongoing trade talks. Trump jacked import tax on Chinese goods to up to 145%, but after consultations he said China faces a total tariff of 55%.
In June, Trump said he had suspended trade talks with Canada over plans to continue the digital services tax, which will be hit by US technology companies. A few days later, discussions resumed when Kearney withdraws taxes.
Under the current tariff structure, the 2020 US-Mexico-Canada Agreement protects eligible goods from Trump’s tariffs. However, a review of the agreement is scheduled for 2026.
Jim Morris contributed to this report from Vancouver, British Columbia.
Original issue: July 11, 2025 10:15am EDT
