35% Tariff: Why Is Trump Reigniting The Trade War With Canada?

Candies are for children; surcharges are for the rest of the world. Trump, as the global distributor of economic sanctions, continues his tour, striking allies and rivals alike. Latest target? Canada. Yet, just a few weeks earlier, Mark Carney was still shaking his hand at the G7. But in trade matters, hugs don’t protect. The global economy is holding its breath, and Ottawa fears retaliation.

A 35% Friendship: Between Handshakes and Tariff Uppercuts

Things were almost fine between Ottawa and Washington. On May 6, Trump warmly welcomed Mark Carney at the White House. Two months later, he sends him a threat letter, accompanied by a 35% surcharge . “If Canada cooperates to stop fentanyl, we will consider revising this decision“, he emphasized.

The measure will take effect on August 1, unless an agreement is signed before then. This new tariff adds to those already in place: 25% on cars, 50% on aluminum and steel, and 50% on copper starting in August. The Canadian economy, highly dependent on exports to the United States (68.3% in May), is under pressure.

Trump is also targeting products not covered by the USMCA, which expands the scope of the increases. The tone is firm, but the strategy remains unclear. As the BBC’s economic analyst summarizes : current tariff volatility makes any long-term economic plan almost impossible.

Between Exemptions and Bluff: Who Wins in this Economic Tug of War?

Not all products will be affected. The USMCA free trade agreement protects a large share of trade, especially in energy. “It is unlikely that fertilizers, pharmaceuticals, or agricultural components will be taxed at 35%“, a White House advisor specifies .

But in this trade war 2.0, announcements often make more noise than the measures themselves. The Canadian economy remains vulnerable despite red lines defined by existing agreements. Trump seems to be playing the bluff card, while keeping the threat credible.

The belligerent posture also targets Europe and Asia. Twenty countries have received similar letters. The administration has pushed back the implementation to August 1 , leaving a negotiation window open. In this intimidation game, each country must choose between yielding or hitting the tariff wall.

Mark Carney responded on X:

The Canadian government will defend its workers and businesses to the end. We remain committed until the last minute.

When Trump Threatens, Markets Quiver and the Economy Staggers

Behind every surcharge lies a shock wave. U.S. indices fell: the S&P 500 dropped by 0.33%, evidence that uncertainty is gripping the markets. The Canadian dollar weakened by 0.3%, a signal of distrust. Meanwhile, gold rose by 1.15%, a safe haven in a darkening climate. Bitcoin also reacted with a spectacular rise.

Trump claims to act for national security. But according to U.S. customs, Canada is responsible for only 0.2% of seized fentanyl. The justification seems weak. In reality, this warning shot aims broader: asserting power ahead of election deadlines and reminding partners to toe the line.

In this shock strategy, the global economy is the true battlefield. Tariff diplomacy replaces negotiations and creates a permanent power struggle. And while some countries yield, others prepare reprisals.

When numbers speak louder than tweets:

• Canada exports 68.3% of its goods to the United States;
• Copper imports will be taxed at 50% starting in August;
• The Canadian dollar has dropped 0.3% against the U.S. dollar;
• The S&P 500 lost 0.33%, affected by trade uncertainty;
• Only 0.2% of seized fentanyl comes from Canada.

Fear of a collapse in American economic supremacy is driving Trump to bare his claws. But in the shadows looms another threat: the BRICS, who are preparing to meet. According to him, an unprecedented trade war is looming. To avoid this shock, the tariff arsenal intensifies… but until when?