Overview

• Trump sent a letter to Prime Minister Mark Carney late Thursday warning of a 35% levy on Canadian goods not covered by the USMCA, effective August 1.
• A U.S. administration official says the higher rate will likely apply only to non-USMCA products, which currently face a 25% duty, though no final decision has been made.
• The letter cites Canada’s alleged failure to curb fentanyl trafficking as justification for the tariff hike and leaves room for upward or downward adjustments.
• The U.S. dollar strengthened against major currencies on Friday following Trump’s announcement, and the Canadian dollar slipped in response to renewed trade jitters.
• Carney pledged to defend Canadian workers and resume negotiations with the U.S. before the August 1 deadline.