TMTPOST -- U.S. President Donald Trump on Thursday announced he will slap Canada with 35%   tariffs   as   Ottawa retaliated on   the tariffs   the Trump administration imposed   for fentanyl trafficking.

Credit：Xinhua News Agency

Starting   August   1, the United States will charge Canada a tariff of   35%   of all Canadian imports, separating   from   all   sectoral tariffs, Trump said in his   letter   to Canadian Prime Minister Carney, according to screenshots posted on   his social   media platform Truth   Social on   Thursday.  

Trump in   the letter claimed the new tariffs, higher   than the existing 25%   levies on Canadian goods, in part resulted   from Ottawa ’ s   retaliation. "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   our Country. Instead of   working with the United States, Canada   retaliated   with its own tariffs"   Trump wrote.

Besides   the fentanyl issue, Trump noted another challenge his administration with   Canada: the trade deficit.   Just like   his   previous letters to heads   of U.S. trading partners   indicating   new tariffs, Trump   described   the trade deficit as "a major threat "   to U.S. economy and national security, which was caused by Canada ’ s   tariffs   and other   trade barriers. Specifically, Trump cited levies   on dairy   goods.

"Canada   charges extraordinary   Tariffs   to our Dairy farmers--up to   40%-- and that   is even assuming   our Dairy Farmers   even have access to   to   sell   their products to the   people of Canada,   "   said Trump in the letter.  

Companies in Canada   will be exempted from the new tariffs if they decide to build or manufacture goods in the U.S.,   according to Trump ’ s letter.   "If for any reason you decided to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,"   Trump wrote.

At the end of the letter, Trump suggested   flexibility, stating if the Canadian   government works   with   his administration to stop the flow of fentanyl,   "we   will,   perhaps, consider an adjustment   to this letter."   "These Tariffs   may be modified, upward or downward, depending on our relationship   with your Country,"   he added.

The announcement   highlighted Trump ’ s frustration   with trade talks with Canada that   just once   halted by   him   and resumed more than a week ago.

Trump on June 27 said   he decided to terminated   U.S.-Canada trade   talks   over   the Digital Services Tax ( DST ) ,   which was slammed   as   a   "direct   and blatant   attack on   our country."   "Based   on this   egregious Tax, we   are hereby terminating ALL   discussions on Trade with Canad, effective   immediately,"   Trump   posted on   his social media   platform Truth Social, suggesting his administration is readying the new   tariff   rates for Canada.   "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,"   the president said   in the post.

Canada ’ s DST   was enacted in June 2024 under former   Prime Minister Justin Trudeau ’ s government.   The legislation levies a 3%   tax on digital services revenue over $20 million, and is retroactive to Jan. 1, 2022. Taxable revenue includes those of online marketplaces, digital advertising, social media, and user data   — which will primarily affect American Big Tech giants such as Amazon.com, Inc., Apple Inc., Google and Meta Platforms, Inc.   These companies   have   to pay DST equal   to 3%   of   the digital services   revenue that they make   from Canadian users above C$20 million   annually.

Canada ’ s Finance   Department on June 30 said the government scraped   its digital services   taxes on   tech   firms   to   support the   negotiations on a new economic and security partnership with the   U.S. Canadian   Prime Minister Carney and President Trump have agreed that parties will resume negotiations with a view towards agreeing on a deal by July 21, 2025, the department   said in   the statement.