Carney 'disappointed' as Trump increases tariffs on Canada to 35%

August 1, 2025

Canadian Prime Minister Mark Carney expressed disappointment over President Donald Trump's decision to increase tariffs on certain Canadian exports from 25% to 35%, citing Canada's alleged failure to curb drug trafficking across the border. Despite this escalation, approximately 90% of Canadian goods imported to the US remain exempt under the United States-Mexico-Canada Agreement (USMCA). This tariff increase is part of Trump's broader initiative implementing import taxes ranging from 10% to 50% on dozens of countries worldwide, despite warnings from economists that these measures could raise prices for US businesses and consumers.

Who is affected

Canadian exporters of non-USMCA protected goods (including dairy products, wood, and leather)
US businesses and consumers who will face higher prices
Exporters from dozens of countries facing new tariffs ranging from 10% to 50%
Asian trading partners particularly hard hit (India at 25%, Taiwan at 20%, Laos at 40%)
Small economies like Vanuatu and Papua New Guinea
Swiss exporters facing a 39% tariff

What action is being taken

The US is implementing increased tariff rates on multiple countries, with Canada's rate rising from 25% to 35%
Canada is making "historic investments" to crack down on drug gangs, including deploying thousands of new police and border patrol agents
Canada is actively seeking trade opportunities with other countries to reduce dependence on the US
Taiwan is engaging in ongoing talks with Washington to complete a trade deal
The White House is continuing negotiations with multiple countries for "framework" agreements

Why it matters

The tariffs represent a significant escalation in global trade tensions initiated by the Trump administration
Nearly 90% of Canadian goods are exempted under USMCA, limiting the impact on Canada-US trade
Economists warn these tariffs could raise prices for US businesses and consumers and negatively impact the US economy
The measures are part of Trump's strategy to rebalance global trade flows and reduce America's trade deficit
The tariffs are causing nations to reconsider their trade relationships, with Canada specifically looking to reduce its "overdependence" on the US market

What's next

Countries have seven days before most of the tariffs take effect
Goods loaded onto ships by August 7 or already in transit will not face new rates if they reach the US before October 5
Mexico has a 90-day extension before potentially facing increased tariffs
Key aspects of "framework" agreements with eight trade partners remain unresolved and require further negotiation

Read full article from source: BBC