The higher-than-expected levy is scheduled to take effect next month.
Canadian goods imported into the U.S. will face a blanket 35 percent tariff starting next month, President Donald Trump said Thursday in an announcement that came in the midst of active trade negotiations between the two countries.
Canada, one of the largest U.S. trading partners, is the latest in a series of countries that have received a letter from Trump in recent days warning of new tariffs set to take effect Aug. 1. Futures for the major stock indexes fell on the news.
The rate announced by the president in a social media post is higher than expected and marks an increase from the 25 percent he set on Canadian goods in February.
A White House official, granted anonymity to discuss the negotiations, said the administration plans to impose the tariff only on goods that do not comply with the 2020 USMCA, though the ultimate details will be up to Trump to decide.
Trump suggested in an earlier interview with NBC that he was considering tariffs of only 15 or 20 percent on all countries that had not reached a trade deal with the U.S.
In a letter addressed to Prime Minister Mark Carney and shared on his social media platform, Truth Social, Trump criticized Canada for what he called its “failure” to prevent drugs from being smuggled into the U.S.
The president has repeatedly said the tariffs are intended as retaliation for Canada not doing enough to prevent fentanyl from crossing the border — though statistics show that relatively little of the drug enters the U.S. by that route.