President Donald Trump followed through on his promise to increase the tariff rate on goods imported from Canada, to move the rate from 35% to 25%, effective on Aug. 1.
The White House announced the change on the evening of July 31, saying that Canada missed an opportunity to avoid the fee, as The Daily Mail reported.
According to the White House, the rate was raised because Canada failed to “do more to arrest, seize, detain or otherwise intercept … traffickers, criminals at large, and illicit drugs.”
Tiff over Tariffs
Trump previously sent a letter to Canada, warning that he intended to raise the duties on any imported goods, which exacerbated the tension between the nations that have had a long-standing partnership.
Trump’s strained relationship with Canada has increased over the last few months, even saying that the U.S.’s neighbor to the north should become the 51st state.
This is in addition to the tariff rate, which was promised if no deal were struck between the two nations by the Aug. 1 deadline.
My statement on Canada-U.S. trade: pic.twitter.com/0PSG9kKtiO
— Mark Carney (@MarkJCarney) August 1, 2025
Canada’s Response
Canadian Prime Minister Mark Carney responded to Trump’s firm action on Aug. 1, saying he is “disappointed” by the tariff increase, but said there is still a possibility of a new trade deal.
“Canada’s government is making historic investments in border security to arrest drug traffickers, take down transnational gangs, and end migrant smuggling,” Carney wrote.
“These include thousands of new law enforcement and border security officers, aerial surveillance, intelligence and security operations, and the strongest border legislation in our history.”
The prime minister said that the increase doesn’t impact goods manufactured in Canada that fall under the U.S.-Mexico-Canada agreement, which was negotiated under Trump’s first term.
The Carve Out
The exceptions to the tariff, known as a carve-out, will lower the nation’s overall tariff rate, and it will likely still be one of the lowest actual applied tariff rates for all of the United States’ trading partners.
Some sectors will be more intensely impacted than others, including lumber, steel, aluminum, and cars, and Carney said the government will explore protective measures.
“For such sectors, the Canadian government will act to protect Canadian jobs, invest in our industrial competitiveness, buy Canadian, and diversify our export markets,” he wrote.
“While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser focused on what we can control: building Canada strong.”
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Author: Charlotte Tyler
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