In a trade war that seems to change by the minute, President Donald Trump said he plans to levy a 35% tariff on imports from Canada starting Aug. 1.
The broad set of 35% tariffs comes after President Trump delayed implementing 25% tariffs on Canadian goods earlier this year. The new tax on imports from Canada is among the numerous tariffs the president has announced this week.
Some of the United States' largest trading partners have been slapped with major tariffs that will begin Aug. 1. Among them, imports from Brazil will face a 50% tariff, while goods from Japan and South Korea will have a 25% tariff.
In a letter addressed to Canadian Prime Minister Mark Carney on Thursday, President Trump threatened Canada with even higher tariffs if it raises tariffs on U.S. goods.
President Trump insisted that the new set of tariffs was intended to boost U.S. manufacturing. He has also claimed that Canada has not done enough to stop the flow of fentanyl into the U.S., a claim that Canadian officials repeatedly deny.
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"If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment to this letter," President Trump wrote. "These tariffs may be modified, upward or downward, depending on our relationship with your country. You will never be disappointed with the United States of America."
But some lawmakers and business experts say the tariff whiplash is already causing headaches for U.S. firms.
"They're tearing their hair out," said Rita McGrath, a professor at the Columbia Business School. "Absolutely. You know, they won't say so in public, but behind the scenes, how can you plan when, you know, one day it's 125% and the next day it is 200% and then the day after that it's 25%?"
Tariffs are an import tax imposed on companies when products cross international borders. Some economists believe companies will tend to pass the cost of tariffs on to consumers.
Fifty-seven percent of major companies said tariffs have squeezed their profits, according to a May survey.
And three in four say they're considering upping prices by at least five percent over the next six months.
"Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August," Carney said in response to President Trump's letter. "Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries."
