During a communal photograph session at the G7 Summit in Kananaskis, Canada, on June 16, 2025, Mark Carney, Prime Minister of Canada was present and attentive as U.S. President Donald Trump made a statement. In the unpredictable scenario of the ongoing trade war, President Trump disclosed his intention to impose a 35% tariff on all incoming goods from Canada starting from the first day of August.
This expansive imposition of a 35% tariff follows President Trump’s delay in the enactment of a 25% tariff on Canadian goods earlier within the same year. The announcement of this latest import tax on Canadian merchandise is one among the many tariffs declared by the president in the course of that week.
Several of the United States’ biggest trading allies are grappling with the prospect of significant tariffs set to take effect from the first of August. Included in this list are imports from Brazil, which are set to face an imposing 50% tariff, and an array of goods from Japan and South Korea, marked for a 25% tariff.
President Trump penned a message to Canadian Prime Minister Mark Carney on Thursday that underscored a potentially higher tariff strain on Canada, should it decide to increase tariffs on U.S. products. President Trump maintained his stance that the latest suite of tariffs primarily aims to invigorate the U.S. manufacturing sector.
Moreover, President Trump put forth his opinion that Canada’s actions to halt the entry of fentanyl into America were insufficient, an accusation that Canadian authorities have refuted time and again. The message from President Trump iterated, ‘The tariffs are subject to modifications, either up or down, based on our country’s relationship with yours. You will never experience disappointment with the United States of America.’
Critics, including legislators and trade analysts, argue the capricious nature of tariff impositions is already inflicting strain on American companies. As Rita McGrath, a professor at the Columbia Business School, passionately noted, ‘It’s a dire situation. Although they may remain silent in public, behind closed doors, how can they strategize when tariff rates fluctuate wildly from one day to the next?’
Tariffs represent an import tax companies must settle whenever their products traverse international boundaries. It’s widely accepted among economists that firms are likely to transition the financial burden of tariffs to the consumer.
According to recent surveys, 57% of big corporations have noted a dip in profits as a result of tariff imposition. Moreover, an overwhelming 75% of surveyed companies have considered the option of inflating their prices by a minimum of 5% within the forthcoming six months.
In response to the letter from President Trump, Prime Minister Carney stated: ‘Amidst these ongoing trade discussions with the United States, the Canadian government remains resolute in its defense of our labor force and industries. Our commitment to protect and uphold their interests will remain as we approach the new August deadline.’
The Canadian Prime Minister also shed light on successes in battling the fentanyl issue: ‘Canada has achieved meaningful progress in curtailing the spread of fentanyl across North America. Our dedication to collaborating with the United States to safeguard lives and fortify communities within both our countries is unwavering.’