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US threatens Canada with 35% tariffs on imports

President Trump cites Canadian dairy import policy, fentanyl as central issues in trade war
Traffic at the border between Canada and the U.S., seen here in Surrey, British Columbia, has fallen since the start of the ongoing trade dispute between the two countries. (Bloomberg via Getty Images)
Traffic at the border between Canada and the U.S., seen here in Surrey, British Columbia, has fallen since the start of the ongoing trade dispute between the two countries. (Bloomberg via Getty Images)

U.S. President Donald Trump threatened to impose 35% tariffs on Canadian imports next month, a measure that, if implemented, could have a wide-ranging impact on the Canadian economy, possibly affecting the housing and job markets.

“Starting August 1, 2025, we will charge Canada a Tariff of 35% on Canadian products sent into the United States, separate from all Sector Tariffs," Trump said in a post on Truth Social. "Goods transshipped to evade this higher tariff will be subject to that higher Tariff.”

Any retaliatory tariffs imposed by Canada would result in another 35% tariff added on, the president added.

The trade dispute that Trump started with Canada soon after taking office for his second term has had a significant impact on Canada’s housing market. An Oxford Economics study cited the situation as one of the causes of a decrease in residential rents in Canada.

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2 Min Read
July 03, 2025 04:51 PM
Pressure on the housing market is leading to lower asking rents, Oxford Economics said.
Garry Marr
Garry Marr

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The dispute has also led Canadians to travel less frequently to the United States. Moreover, Ontario Premier Doug Ford estimated that higher tariffs could cost Canada a half-million jobs, many in Ontario.

Representatives of the Canadian and U.S. governments have been attempting to hammer out a trade deal prior to the start of August. Canada set a self-imposed deadline of July 21 to complete the negotiations.

Trump stated in his social media post that the U.S. would not impose tariffs if Canadian companies decide, “to build or manufacture products within the United States."

He also repeated his opposition to Canada’s tariff barriers to dairy product imports and mentioned the issue of fentanyl entering the U.S. from Canada.

Canadian Prime Minister Mark Carney responded to President Trump's post in a statement on the X social media platform.

“We are building Canada strong. The federal government, provinces and territories are making significant progress in building one Canadian economy," Carney said. "We are poised to build a series of major new projects in the national interest. We are strengthening our trading partnerships throughout the world."