Trump Drops New Bombshell Threat On Largest U.S. Trade Customer — Coming Aug. 1

President Donald Trump dropped a new tariff threat on Canada, promising an additional 35 percent import tax on all goods from the largest U.S. trade customer and the 2nd-largest trading partner — starting in a few weeks.

Trump’s habit of whiplashing between issuing massive tariff threats and backing off of them spawned the derisive Wall Street acronym TACO — “Trump Always Chickens Out” — to describe a “TACO trade” strategy to outsmart Trump’s chaotic market-roiling tariff policies.

This past week alone, he’s already threatened to slap a 25 percent tariff on a pair of key trading partners — then extended a key deadline from July 9 to August 1 while also threatening steep tariffs on other countries. All of this has taken place against the backdrop of hundreds of promised trade deals that have thus far largely failed to materialize.

The president threw another grenade Thursday night when he posted a letter announcing a new 35% tariff on Canada:

THE WHITE HOUSE WASHINGTON
July 10, 2025
The Right Honorable Mark Carney, PC, MP Prime Minister of Canada Ottawa

Dear Mr. Prime Minister:

It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship. and the fact that the United States of America has agreed to continue working with Canada. despite Canada having financially retaliated against the United States. 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 into our Country. Instead of working with the United States, Canada retaliated with its own Tariffs. Starting August I, 2025, we will charge Canada a Tariff of 35% on Canadian products sent into the United States, separate from all Sectoral Tariffs. Goods transshipped to evade this higher Tariff will be subject to that higher Tariff. As you are aware, there will be no Tariff if Canada, or companies within your Country, decide to build or manufacture product within the United States and. in fact, we will do everything possible to get approvals quickly, professionally. and routinely — In other words, in a matter of weeks.

If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge.

Also, I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers, which cause unsustainable Trade Deficits against the United States. Canada charges extraordinary Tariffs to our Dairy Farmers — up to 400% — and that is even assuming our Dairy Farmers even have access to scll their products to the people of Canada. The Trade Deficit is a major threat to our Economy and, indeed, our National Security!

If Canada works with me 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. You will never be disappointed with The United States of America.

Thank you for your attention to this matter!

With best wishes, I am, Sincerely,

(GIANT SIGNATURE)

DONALD J. TRUMP PRESIDENT OF THE UNITED STATES OF AMERICA

Stock futures dipped immediately on the news.