The US threatens Canada with a 35% tariff starting August 1.

U.S. President Donald Trump threatened Canada on Thursday with a 35% tariff starting August 1 and said he might consider adjusting it if the country helps him stem the flow of fentanyl into the U.S. or removes its barriers.

In a letter similar to those the Republican leader began sending this week to some trading partners with the new tariffs he will implement starting next month, Trump warned Prime Minister Mark Carney that if his country raises tariffs in turn, the amount they choose will be added to the 35% tariffs he announced.

According to his statement, fentanyl trafficking is not the only challenge Washington faces with its neighboring country. Its tariff and non-tariff policies, in his opinion, cause unsustainable trade deficits for the US, which pose a "major threat" to both its economy and its national security. Trump recalled that he initially imposed tariffs on Canada precisely to address the "crisis" that the drug is causing in the US, which he attributed in part to Ottawa's "failure" to curb it.

"Instead of working with the US, Canada responded with its own tariffs," he criticized in that letter, which emphasized that tariffs are not contemplated for companies that choose to cross the border and establish themselves in the US.

The letter added that if Canada cooperates in halting the flow of these drugs across the border, Washington will "perhaps" consider adjusting the announced figure, which could be modified "up or down" depending on the relationship with the country. "There will be no tariffs if Canada, or Canadian companies, choose to build or manufacture products within the United States, and, in fact, we will make every effort to grant approvals quickly, professionally, and routinely," Trump's letter added.

Trump has vowed to continue issuing these tariff threats until each trading partner reaches a bilateral trade agreement, after announcing on April 2 an additional 10% global tariff and a higher tariff for countries with large trade deficits in his favor, something he described as "reciprocal," although it isn't.

On April 9, the date these "reciprocal" tariffs went into effect, Washington announced a truce that was set to expire this past Wednesday and was extended until August.

Trump and Carney had set out to reach a resolution to bilateral trade negotiations to avoid a new round of tariff retaliation, after Trump failed to exclude his neighbor from the tariff list on April 2, the so-called "Liberation Day."

Among those receiving similar letters this week are Japan, South Korea, Myanmar, Laos, Cambodia, Thailand, Serbia, Bangladesh, Indonesia, South Africa, Bosnia and Herzegovina, Tunisia, Kazakhstan, and Malaysia. In Brazil's case, the 50% tariffs were justified in retaliation for the trial of former President Jair Bolsonaro.