Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.

The letter reiterated Trump’s complaints about dairy quotas, fentanyl and the U.S. trade deficit, which is mostly fueled by American refineries’ thirst for Canadian oil. His social media post caused the Canadian dollar to immediately tumble, indicating the market wasn’t expecting this escalation.

President Donald Trump is once again ratcheting up trade barriers with one of America's largest trading partners. On Thursday, the president announced a 35 percent tariff on all Canadian goods not covered by the United States-Mexico-Canada Agreement (USMCA) to take effect on August 1,

The country’s new prime minister, Mark Carney, has been called the “Trump whisperer,” and negotiations have been cordial and professional. But it’s been a wild ride.