The White House says U.S. President Donald Trump has signed an executive order to increase a tariff on Canadian goods to 35 per cent.
In a statement issued Thursday evening, the White House said the new tariff rate, set at 25 per cent since March, will rise effective Friday.
“Canada has failed to co-operate 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,” says the statement.
However, the tariff will only apply to Canadian goods that don’t meet the terms of the Canada-U.S.-Mexico Agreement, which means the vast bulk of Canada’s exports can cross the border tariff-free.
Earlier Thursday, Trump said he had not spoken with Prime Minister Mark Carney, the day before his deadline to increase tariffs on Canadian products.
Officials tight-lipped
Speaking to reporters at the White House Thursday afternoon, Trump was asked whether Carney’s announcement that Canada plans to recognize a Palestinian state was a deal-breaker on trade.
“I didn’t like what they said, but you know, that’s their opinion,” Trump said. “Not a deal-breaker. But we haven’t spoken to Canada today. He’s called and we’ll see.”
Canada’s trade negotiating team is in Washington, but officials were tight-lipped Thursday about who they were meeting with — if anyone.
Trump’s comments indicate Canada remains in limbo without a deal to stave off a hike in tariffs.
Also on Thursday, Trump announced a 90-day extension of the current tariff regime with Mexico, which was also facing the threat of an increase.
Speaking from the White House on Thursday, U.S. President Donald Trump said Canada’s plan to recognize Palestinian statehood in September would not stop the ongoing trade negotiations, with his Aug. 1 deadline hours away.
Canadian team downplayed likelihood of deal
For more than a week, Carney and other Canadian officials have been downplaying the likelihood of getting a deal by the deadline. They’ve also cast doubt on the urgency, given the exemption that allows roughly 90 per cent of Canadian exports to enter the U.S. tariff-free.
David Paterson, Ontario’s representative in Washington, told CBC’s Power and Politics guest host David Common that Canadians should not be overreacting to the lack of a deal right now.
“The sun will shine in the morning and we will carry on,” Paterson said Thursday from his office in Canada’s embassy in Washington.
“We really support the prime minister’s approach,” Paterson said. “When the time is right for that agreement to come together, it will.”
Comments from U.S. officials
White House press secretary Karoline Leavitt said Trump could still reach more deals with trading partners Thursday evening, but if not, the threatened tariff increases will kick in.
“Those countries that either do not have a deal or have a letter, they will be hearing from this administration by the midnight deadline tonight,” Leavitt told reporters in a briefing.
WATCH | Canadians’ boycott of U.S. booze draws attention south of the border:
The U.S. liquor sector is putting economic and political pressure on the Trump administration as the Canada-U.S. trade deal deadline approaches. They hope the administration might offer limited carve-outs to their industry or rethink tariffs altogether.
Trump’s Commerce Secretary Howard Lutnick suggested Thursday that Trump will follow through with his threat to raise the tariff rate on Canadian imports.
“I just don’t see the president stepping off the gas,” Lutnick said in an interview on Fox Business Network, during which he criticized Canada for being one of the only countries to retaliate against Trump’s tariffs.
Other deals
Trump issued similar ultimatums with the same Aug. 1 deadline to 17 major trading partners across the globe, including Canada, Mexico, the European Union, Japan and Taiwan. Each contained threats of tariffs in the range of 30 per cent.
Last week, Trump announced deals with the EU and Japan with across-the-board tariffs of 15 per cent as well as vague commitments for hundreds of billions of dollars of investment in the U.S.
Separately, Trump has imposed a 50 per cent tariff on steel and aluminum imports from around the world. Canada is the top supplier of both products to the U.S.
