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.

The deadline for the duties to go into effect are still three weeks, which may mean the announcements could be a negotiating move.

Economists and investors are left guessing by President Donald Trump’s tariff agenda as he grants extensions then threatens higher tariffs in letters to trading partners. It remains to be