Washington (AFP) – Canada will face a 35 percent tariff on exports to the United States starting August 1, President Donald Trump said in a late-night letter to Prime Minister Mark Carney that upends negotiations between the close allies. The notice was the latest of more than 20 such letters Trump has issued since Monday as he continues to widen a global trade war, adding in an interview that countries which have yet to receive a letter from him would see a 15 percent or 20 percent levy.
Canada’s 35 percent tariff marks a step up from an existing 25 percent level, but products complying with the United States-Mexico-Canada Agreement (USMCA) are expected to remain exempt, a Trump administration official told AFP. Canadian energy resources are anticipated to still face a lower levy, the official said, while noting that Trump has yet to make final decisions on the matter. Trump told reporters Friday that Ottawa reached out following the release of his letter: “I think it was fairly well received. It is what we need. So we’ll see what happens.”
Canada and the United States have been locked in trade negotiations in hopes of reaching a deal by July 21, but Trump’s latest threat appeared to have shifted that deadline. Both Canada and Mexico are trying to find ways to satisfy Trump so the USMCA free trade deal uniting the three countries can be put back on track. “Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1,” Carney posted Thursday night on X.
The USMCA replaced the previous NAFTA accord in July 2020, after Trump successfully pushed for a renegotiation during his first term in office. It was due to be reviewed by July next year, but Trump has thrown the process into disarray by launching trade wars after he returned to office in January. Canadian and Mexican products were swiftly hit by 25 percent US tariffs this year, with a lower rate for Canadian energy. Trump targeted both North American neighbors, saying they did not do enough on illegal immigration and the flow of illicit drugs — particularly fentanyl — across borders. Canada contributes less than one percent of the drug to the illicit US supply, according to Canadian and US government data.
Trump eventually announced exemptions for goods entering his country under the USMCA, covering a large range of products.
**Reciprocity** – Thursday’s letter came despite what had been warming relations between Trump and Carney, who has faced the brash Republican’s regular musings that Canada should become the 51st US state. The Canadian leader visited the White House on May 6 and had a cordial Oval Office meeting with Trump. They met again at the G7 summit last month in Canada, where leaders pushed Trump to back away from his punishing trade war. Canada also agreed to rescind taxes impacting US tech firms that had earlier prompted Trump to retaliate by calling off trade talks.
Separately, Trump announced in an interview with NBC that he was thinking of slapping blanket tariffs of 15-20 percent on countries that had not yet received his letters. The letters announced tariff rates on Brazil of as much as 50 percent, to kick in on August 1 unless better terms can be found before then. Trump told NBC that the letter to the 27-country European Union, a major US trading partner, would be sent “today or tomorrow (Friday).” Brazilian President Luiz Inacio Lula da Silva said Thursday that he is willing to negotiate with Washington after Trump said he would hit South America’s biggest economy with his tough tariff. He, however, reiterated that the Brazilian government is evaluating reciprocity measures. In his letter to Lula, Trump criticized the treatment of his right-wing ally Jair Bolsonaro, the former Brazilian president.
© 2024 AFP
