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.

Trump’s move deepens a rift between two North American countries that have suffered a debilitating blow to their decades-old alliance.

The US will impose a tariff of 35 per cent on Canadian goods from August 1, Donald Trump said in a letter late on Thursday. The US president separately told NBC News on Thursday that any countries that had not received a letter from him setting out new tariff regimes would face so-called blanket tariffs of 15-20 per cent.