Donald Trump says the United States will impose a 35 per cent tariff on imports from Canada next month, in an aggressive increase to the 25 per cent tariff the president first announced in February.
In a letter posted to his social media platform on Thursday night, local time, Mr Trump told Canadian Prime Minister Mark Carney the new rate would start from August 1.
He said it would increase if Canada retaliated.
The US president justified the tariffs as necessary to manage America's opioid crisis, which he said was partially due to fentanyl being smuggled into the US via Canada.
The two countries have been at the negotiating table discussing trade since Canada dropped plans for a tax on US technology firms following pressure from the White House.
Mr Trump closed the letter by suggesting if Canada helped the US prevent fentanyl from entering the country, then he would "perhaps" consider adjusting the tariff rates.
Australia could be impacted by blanket tariffs
In an interview with NBC News published on Thursday, local time, Mr Trump told NBC News he would likely impose a blanket tariff of 15 or 20 per cent on most trading partners.
That is above the 10 per cent "base" tariff announced in April.
"Not everybody has to get a letter. You know that. We're just setting our tariffs," he said.
"We're just going to say all of the remaining countries are going to pay, whether it's 20 per cent or 15 per cent. We'll work that out now."
Rabobank senior strategist Ben Picton warned Australia could be impacted.
"Don’t discount the possibility of Australia facing a higher tariff rate than 10 per cent," he wrote in a post on X.
"We’ve recently annoyed the Americans on defence spending, Israel sanctions, free speech (eSafety Commissioner) and non-tariff barriers for US tech (news media bargaining code)."
Mr Trump has broadened his trade war in recent days, setting new tariffs on a number of countries, including allies Japan and South Korea, along with a 50 per cent tariff on copper.
Brazil threatens retaliatory tariffs
In a related development, Brazilian President Luiz Inácio Lula da Silva announced he would impose retaliatory tariffs on the US if Mr Trump followed through on a pledge to boost import taxes by 50 per cent over the South American country's criminal trial against his predecessor, Jair Bolsonaro.
"If there's no negotiation, the reciprocity law will be put to work," Mr da Silva told TV Record.
"If he charges 50 [per cent tariffs] from us, we will charge 50 from them. Respect is good. I like to offer mine and I like to receive it."
There are concerns Mr da Silva's comments increase the risk of a tariffs war erupting between the two countries, similar to the clash between the US and China.
Mr Trump has vowed to respond forcefully if countries seek to punish the US by adding tariffs of their own.
Mr Trump's letter to Brazil opened up a new front in his trade wars, with the US leader directly using import taxes to interfere with another nation's domestic politics.
ABC/wires
