Alexandar Sullivan:
In a dramatic escalation of trade tensions, U.S. President Donald Trump on August 2 raised tariffs on certain Canadian goods from 25% to 35%, citing Canada’s alleged failure to curb fentanyl trafficking. The move triggered swift reaction from Canadian Prime Minister Mark Carney, who called the decision “disappointing” and vowed to protect Canadian jobs and pursue diversification of trade partners.
The tariff hike was part of a broader wave of economic measures unveiled in an executive order targeting 69 countries, with new import duties ranging from 10% to 50%. Among the hardest hit were Brazil (50%), Switzerland (39%), India (25%), and Taiwan (20%). Only a few nations, such as Mexico and South Korea, managed to secure lower tariffs through last-minute negotiations.
Despite the 35% headline rate, nearly 90% of Canadian exports to the U.S.—including fresh produce, energy, and industrial goods—remain exempt under the USMCA trade agreement. However, affected sectors like dairy, wood, and leather could still face significant costs.
The White House defended the decision, with Press Secretary Karoline Leavitt stating Trump is “rebuilding the greatest economy in the history of the world.” Analysts warned the move may drive up consumer prices and hurt American businesses.
Carney stressed Canada’s efforts in fighting drug trafficking and reaffirmed a commitment to strengthening the national economy. “Canada is making historic investments to stop illicit drugs,” he said. Meanwhile, Canada’s former trade minister Mary Ng emphasized the urgency of reducing reliance on the U.S., saying, “There are markets beyond the United States.”
As the tariffs take effect, the fallout may reshape global supply chains and intensify pressure on already strained international relationships.
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