WASHINGTON — President Donald Trump has ordered a sweeping 35 percent import duty on virtually all Canadian products, intensifying a trade standoff that had been edging toward resolution only days ago. The directive, delivered in a late-night letter to Prime Minister Mark Carney, disrupts the joint effort to refresh the United States-Mexico-Canada Agreement (USMCA) and pushes negotiators toward an August 1 showdown.
Trump’s decision raises the existing 25 percent levy and widens his tariff blitz that now spans more than twenty countries in less than a week. Goods that already meet USMCA rules will still enter duty-free, according to a senior administration official, and certain energy exports may receive reduced treatment, pending a final review.
New Deadline, New Calculus
Ottawa and Washington had been working toward a July 21 target for a revised pact. With the tariff threat locked in, Carney signaled Canada would “protect our workforce and industry without flinching” as the calendar resets. Mexican officials, also at the table, are re-examining their own concessions to keep the three-nation framework intact.
Trade War 2.0
Since returning to the Oval Office in January, Trump has wielded tariffs as blunt leverage, citing border security gaps and opioid traffic to justify harsher terms for neighbors. Government data, however, show Canada’s contribution to the illicit U.S. fentanyl supply is minimal. Earlier rounds of duties prompted exemptions for USMCA-compliant goods—an escape hatch many exporters are now scrambling to use.
Diplomacy on Ice
The abrupt escalation follows a stretch of apparent goodwill: Carney’s May visit to the White House and a cordial exchange at June’s G7 summit had suggested a thaw. Ottawa even withdrew a planned digital-services levy on U.S. tech giants. Those gestures now appear insufficient as Trump signals broader action—hinting on national television that non-letter recipients may soon face blanket tariffs of 15–20 percent, with Brazil already threatened at 50 percent and the European Union next in line.
Business Bracing for Impact
Canadian firms have three weeks to absorb, reroute, or retool before the tariff wall rises. Supply chains intertwined since NAFTA’s birth in 1994 face immediate cost pressure, and analysts warn that cross-border price spikes could echo throughout North America’s manufacturing and retail sectors.
Come August 1, the latest duty becomes more than a fiscal surcharge; it becomes the litmus test for whether the continent’s flagship trade accord survives—or fractures—under the weight of tariff brinkmanship.
