US president Donald Trump has signed an executive order introducing new tariffs for 69 of its trading partners, and another including an increased tariff on Canada.
The tariff on Canada was expected to be at a rate of 25%, but yesterday’s executive order raised it to 35%, effective from today [1 August 2025].
According to a White House fact sheet, the reason for this adjustment was that ‘Canada has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the president’s actions to address this unusual and extraordinary threat to the United States’.
A statement from Candance Laing, president and CEO of the Canadian Chamber of Commerce, in response to this reads: “The White House fact sheet should be called a fact-less sheet when it comes to basing trade decisions about Canada on the fentanyl emergency. More fact-less tariff turbulence does not advance North American economic security. Businesses – in Canada and the US – urgently need certainty.
“The Carney government is right to prioritise a strong, future-focused deal over a rushed one. A little more time now can deliver lasting benefits for an integrated North American economy – and that’s well worth the wait.
“In the meantime, we have the Canada-United States-Mexico Agreement (CUSMA), which, at present, is still being honoured, leaving much of our cross-border trade tariff-free. However, not all Canadian businesses have this advantage and the jump to 35% tariffs on non-CUSMA compliant products places an additional load on them.”
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Mark Carney, Canada’s prime minister, himself issued a statement in response to the news. “While the Canadian government is disappointed by this action, we remain committed to CUSMA, which is the world’s second-largest free trade agreement by trading volume.”
He added: “The United States has justified its most recent trade action on the basis of the cross-border flow of fentanyl, despite the fact that Canada only accounts for 1% of US fentanyl imports and has been working intensively to further reduce these volumes.”
In the statement, he also confirmed that Canada will continue to negotiate with the US on its trading relationship.
My statement on Canada-U.S. trade: pic.twitter.com/0PSG9kKtiO
— Mark Carney (@MarkJCarney) August 1, 2025
Meanwhile, another executive order has been signed, formalising tariffs on other countries around the world. The UK, as expected, will be subject to a 10% tariff following negotiations between Trump and UK prime minister Sir Keir Starmer. This is the lowest rate outlined in the executive order.
The majority of countries mentioned in the executive order, including those in the EU, will be subject to up to 15% tariffs from today. The highest tariff rates outlined in Trump’s executive order are on Switzerland (39%), Laos (40%), Myanmar (40%) and Syria (41%).
Although, despite being listed as 10% in today’s document, Trump announced yesterday he would be imposing an additional 40% tariff on Brazil, taking its total tariff rate to 50%.
The US and China are still reportedly negotiating a deal, so no tariffs on China were announced today.
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