Trump raises tariffs on Canada from 25% to 35%

The US announced that it will increase the tariff on Canadian goods from 25% to 35%. Canadian Prime Minister Trudeau said that the US tariffs will significantly affect timber, steel, aluminum, and automobiles. He vowed to take action to protect Canadian jobs, prioritize buying Canadian products, invest in industrial competitiveness, and diversify export markets.

The White House said that US President Trump signed an executive order on Thursday (July 31) to raise the tariff on Canadian goods from 25% to 35%, with the new rate applying to all products not covered by the United States-Mexico-Canada Agreement (USMCA).

A White House fact sheet stated that goods transshipped to other countries to avoid the new tariffs will be subject to a 40% transshipment tax.

The US increased tariffs on Canada partly because it believes Canada has failed to prevent fentanyl smuggling.

Trump had said that any country failing to reach an agreement with the US by Friday would face higher tariffs on its goods. Canadian Prime Minister Justin Trudeau expressed disappointment with Trump's decision earlier on Friday. Trump said that Trudeau had contacted the US side, but no dialogue was held between the two sides.

In a post on X, Trudeau stated, "Although we will continue to negotiate with the US on trade relations, the Canadian government is focusing on what we can control: building a strong Canada."

Trudeau said that the US tariffs will significantly affect timber, steel, aluminum, and automobiles. He vowed to take action to protect Canadian jobs, prioritize purchasing Canadian products, invest in industrial competitiveness, and achieve diversification of export markets.

Trudeau added that, while the US justified its measures by citing cross-border fentanyl flows, Canada only accounts for 1% of US fentanyl imports, and has been working to further reduce its imports.

Trump told NBC News on Thursday that he is willing to have further discussions with Canada and added that he might even call Trudeau later that day.

Ontario Premier Doug Ford called on Ottawa to impose a 50% countervailing duty on US steel and aluminum imports. Ontario accounts for about 40% of Canada's GDP and is the country's industrial hub.

In a post on the X platform, he stated, "Canada should not accept any inappropriate agreement. Now is not the time to give in. We need to stand firm."

Trump said that although he loves Canada, Canada has been "very bad" to the US over the years.

US Commerce Secretary Ruddy said that Trump may reconsider the tariff if Trudeau "starts showing charm and stops retaliating."

Earlier on Thursday, Trump agreed to give Mexico 90 days to work on a broader trade agreement.

Mexico still has to pay a 25% tariff on products exported to the US that do not meet the requirements of the USMCA. Trump has linked this tariff to demands that Mexico take more measures to curb drug and human trafficking.

About 75% of Canada's exports go to the US. Economists say the Canadian economy has shown remarkable resilience against tariffs and is expected to avoid a recession.

In May this year, about 90% of Canadian exports to the US were exempted under the USMCA. In recent months, compliance levels have improved significantly, and some companies have also diversified their exports to avoid tariffs.

Government data shows that Canadian exports to the US decreased by 10 percentage points between May 2024 and May 2025, accounting for 68% of total exports, mainly concentrated in manufacturing products such as cars and parts, as well as steel and aluminum products.

Prime Minister Trudeau told reporters in June this year that if the two countries fail to reach a trade agreement by August 1, Canada may impose more countervailing duties on its steel and aluminum exports to the US.

Sources: DW

Original: https://www.toutiao.com/article/1839304724051072/

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