Islamabad, July 11, 2025: Trump 35% tariff on Canada shakes global markets as U.S. President Donald Trump announced a steep hike on Canadian imports starting August 1. The decision, outlined in a letter to Prime Minister Mark Carney, raises the tariff from 25% to 35%, with threats of further increases if Canada retaliates.
Trump cited Canada’s “unfair trade practices” and its alleged role in fentanyl trafficking as core reasons behind the move. He added, “If Canada works with me to stop the flow of fentanyl, we may consider revising the tariffs.”
Carney responded on X (formerly Twitter), assuring the public that Canada would “stand firm” in protecting its economy and workers, while pursuing a fair deal with Washington.
Despite the blow, goods covered under the USMCA trade deal remain unaffected. Tariffs on energy and fertilizer also remain at 10% for now, pending further review by the Trump administration.
Ripple Effects Hit Global Markets
The Trump 35% tariff on Canada is just part of a broader global push. New blanket tariffs between 15% to 20% are reportedly being prepared for other U.S. trading partners, with Trump confirming that “all remaining countries will pay.”
European and Asian markets reacted negatively as traders braced for a similar move on the European Union, expected later this week.
Economist Joseph Capurso warned, “If this mirrors the U.S.-China trade war, we’re looking at major global financial instability.”
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Global Leaders Respond
Meanwhile, leaders from Myanmar and the Philippines are seeking dialogue with Trump to reduce current U.S. tariff rates. Myanmar’s government requested a cut from 40% to 10-20%, while the Philippines confirmed a Washington visit this month to negotiate its 20% rate.
Canada remains the U.S.’s second-largest trading partner, buying $349.4 billion in goods last year and exporting $412.7 billion. The trade imbalance is one of Trump’s main concerns.
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Carney’s government, having recently scrapped a digital services tax to ease tensions, still hopes to finalize a new U.S.-Canada economic deal by July 21.
Trump, however, left the door open for further adjustments, saying tariffs “may be modified, upward or downward, depending on our relationship.”
