“Breaking: Canada Mistakenly Thinks It’s the 51st State, Sends 35% to the IRS”
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35% Tariff on Canadian Imports: U.S. President Donald Trump announced in a letter to Canadian Prime Minister Mark Carney that a 35% tariff on imports from Canada would take effect on August 1, 2025, unless a trade agreement is reached, with the rate applying to goods not covered by the USMCA. This rate is an increase from previous tariffs and could be adjusted based on cooperation on issues like fentanyl trafficking.
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Canadian Corporate Tax Incentives: Canadian-controlled private corporations (CCPCs) may qualify for a 35% refundable tax credit on up to CAD 3 million (proposed to increase to CAD 4.5 million) in scientific research and experimental development (SR&ED) expenditures annually.
Donald Trump has said the US will impose a 35% tariff on imports from Canada from the beginning of August, and threatened to impose blanket tariffs of 15% or 20% on most other trading partners.
The US president sent a letter to Canada late on Thursday, after an interview in which he warned EU nations to expect a tariff announcement “today or tomorrow”.
Countries that do not receive a letter from Trump face larger tariffs than those that have a agreed a “reciprocal” deal at a rate of 10%.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%,” Trump said in an interview with NBC News. “We’ll work that out now.”
The surprise declaration has made the EU nervous that the president could change his mind on signing an agreement in principle negotiated between the two sides to ease the transatlantic trade war.
Brussels has €21bn worth of retaliatory tariffs on US imports ready to come into force at midnight on Monday, but a spokesperson confirmed they could be paused in the event Trump signed off on the framework.
In a letter released on his social media platform late on Thursday, Trump told the Canadian prime minister, Mark Carney, that the new rate for his country would come into effect on 1 August and would be increased in the event of any retaliation.
Carney wrote on social media that his government would continue to defend Canadian workers and businesses in their negotiations with the US as they worked toward that deadline.
“Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” he said in a post on X. “We will continue to do so as we work towards the revised deadline of 1 August.”
In his letter to Carney, Trump also complained about what he referred to as the flow of fentanyl from Canada. “If Canada works with me to stop the flow of fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote.
Canadian officials say a minuscule amount of fentanyl entering the US originates from Canada. Carney reminded Trump of the role that Canada plays in the battle to reduce the amount of the powerful opioid coming into North America more on ..
