President Donald Trump said Thursday evening that Canada will face higher duties for some products beginning next month due to the Canadian government’s decision to retaliate against U.S. duties applied earlier this year. He also took the opportunity to reiterate his call for greater market access for U.S. dairy producers.
In March, Trump imposed 25% duties on Canadian exports not covered by the U.S.-Mexico-Canada Agreement – reduced to 10% for energy products and potash. Canada responded by hiking duties on some $22 billion in U.S. exports, including orange juice, peanut butter, wine, spirits, beer and coffee. The Canadian government responded to subsequent sectoral tariffs applied to vehicles, steel and aluminum by imposing duties on U.S. vehicle, steel, aluminum and other consumer goods exports.
Those retaliatory measures have prompted further tariff hikes from Trump, the president said in a letter to Canadian Prime Minister Mark Carney posted on Truth Social.
From Aug.1, Canadian products not covered by the USMCA will face a 35% tariff, up from the existing 25%, an administration official told Agri-Pulse. Energy products and potash will still face the reduced 10% rate, the official said.
However, the official pointed out that “no final paper has been drafted or final decisions by the POTUS made,” referring to the president of the United States.
“As you will recall, the United States imposed Tariffs on Canada to deal with our Nation’s Fentanyl crisis, which is caused, in part, by Canada’s failure to stop the drugs from pouring into our Country,” Trump wrote to Carney, according to the letter. “Instead of working with the United States, Canada retaliated with its own Tariffs.”
The president went on to warn Carney that any further tariff hikes would be met with in-kind tariff increases.
Trump also took aim at what has become one of his top peeves with the U.S.’ northern neighbors: high out-of-quota tariffs on dairy products.
“Canada charges extraordinary Tariffs to our Dairy Farmers,” the president wrote, arguing that some rates can reach 400%. “[A]nd that is assuming our Dairy Farmers even have access to sell their products to the people of Canada.”
U.S. dairy producers have long complained that Canada’s allocation of its tariff-rate quotas for dairy products disincentivizes purchases of U.S. products, leaving their quotas unfilled. Dairy producers in New Zealand have raised similar gripes with Ottawa, and the issue has been the subject of challenges under the USMCA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership dispute resolution mechanisms.
The president concluded by leaving the door open to future tariff reductions.
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment,” Trump wrote.
Notably, drug seizures at the northern border in the 2024 fiscal year were 12,000 pounds, with fentanyl making up just 43 pounds of that total, according to U.S. Customs and Border Protection. By contrast, officers at the southern border seized 275,000 pounds, which included over 21,000 pounds of fentanyl.
The higher duties will kick in the same day as a spate of higher country-specific reciprocal tariffs, following the president’s decision this week to defer those duties beyond an initial 90-day pause. Trump has been sending letters to U.S. trading partners this week informing them of their expected tariff rates, and taken the opportunity to issue a new tariff threat to Brazil.
This article was originally published by Agri-Pulse. Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.
