Kathmandu: U.S. President Donald Trump has issued a stern warning to Canadian Prime Minister Mark Carney, stating that a 35 percent tariff will be imposed on Canadian exports to the U.S. starting August 1 if a new trade deal is not reached. This is the latest in a series of over 20 similar letters sent by Trump since Monday, heightening tensions in an already volatile global trade environment.

Deadline Shift in USMCA Talks
The United States, Canada, and Mexico are currently engaged in negotiations to revise the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA in 2020. A deal was initially hoped for by July 21, but Trump's latest threat appears to have moved the effective deadline to August 1.

Despite earlier progress, Trump’s aggressive posture has created uncertainty. Prime Minister Carney responded via social media late Thursday, writing:

“The Canadian government has strongly defended our workers and businesses during the current trade negotiations with the United States. We will continue to do so as we work towards the revised deadline of August 1.”

Trade, Tariffs, and Tensions
This move marks a continuation of Trump’s broader protectionist trade policies, where Canadian and Mexican goods had previously been hit by 25% tariffs, especially in the energy and manufacturing sectors. While Trump has partially waived some of these tariffs under the USMCA framework, he continues to accuse both countries of failing to curb illegal immigration and drug trafficking.

Thursday’s letter arrives despite what was previously described as a “warm relationship” between Trump and Carney. The two met at the White House on May 6, followed by another encounter at the G-7 Summit in Canada, where Trump was urged by fellow leaders to tone down his trade threats.

However, Carney’s resistance to Trump’s repeated call for Canada to become “the 51st state” has remained a sticking point.

Threats Extend to Other Nations
Trump’s aggressive trade maneuvering isn’t limited to North America. In an NBC interview, he stated that countries which haven’t yet received his letter — including the European Union and Brazil — could face tariffs between 15 to 20 percent by August 1 if trade terms are not renegotiated.

Brazilian President Luiz Inacio Lula da Silva responded on Thursday, indicating a willingness to engage in talks with the U.S., but also warned of “reciprocal measures” if Trump follows through on his threat. Trump’s letter to Lula also included criticism of his treatment of right-wing former President Jair Bolsonaro, Trump’s ideological ally.

Global Uncertainty as August 1 Looms
With the August 1 deadline rapidly approaching, businesses and governments around the world are bracing for a potential escalation in trade tensions. Trump’s tactics have drawn both domestic support and international condemnation, as markets watch closely to see if these threats result in real economic disruption or shift negotiation outcomes.

Meanwhile, Canada and Mexico are working intensively to salvage the USMCA, hoping to avoid further shocks to their economies amid an increasingly unpredictable trade landscape.