U.S. to impose 35% tariff on Canadian imports, exempting USMCA goods for now... President Donald Trump announced Thursday evening the U.S. will impose a 35% tariff on imports from Canada, effective Aug. 1. An exclusion for goods covered by the United States-Mexico-Canada Agreement (USMCA) on trade was expected to stay in place and 10% tariffs on energy and fertilizer were also not set to change, though Trump had not made a final decision on those issues, an administration official said.
“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,” Trump posted. “The flow of Fentanyl is hardly the only challenge we have with Canada,” Trump said. “Canada charges extraordinary Tariffs to our Dairy Farmers up to 400% — and that is even assuming our Dairy Farmers even have access to sell their products to the people of Canada. The Trade Deficit is a major threat to our Economy, and indeed our National Security.”
The move raises tariffs on non-USMCA Canadian goods from 25% to 35%. The announcement, delivered in a letter to Canadian Prime Minister Mark Carney and posted on social media, follows several weeks of fraught trade negotiations. Both nations had been aiming to reduce tariffs ahead of a self-imposed July 21 deadline. These tariffs are separate from the sectoral tariffs Trump has imposed on steel, aluminum and automobiles.
High odds for Trump/Xi summit after ‘constructive’ U.S./China talks... Secretary of State Marco Rubio said the likelihood of a summit between President Donald Trump and Chinese President Xi Jinping later this year is “high,” following what he called “very constructive and positive” talks with Chinese Foreign Minister Wang Yi in Kuala Lumpur.
Meeting on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit, Rubio said, “Obviously there are some issues we’re going to have to work through and that’s to be expected with countries of our size and scope and influence in the world. But I thought it was a very constructive and positive meeting and gave us some things we can work on together.”
This marks the first in-person meeting between the two diplomats since Rubio became Secretary of State in January. While major disagreements remain, both sides highlighted potential areas for cooperation as well as continued challenges in the U.S./China relationship.
Washington renews focus on Indo-Pacific region amid rising trade concerns... Rubio’s first trip to Asia since taking office is part of an effort to renew U.S. focus on the Indo-Pacific region. Rubio also met Japan’s foreign minister and South Korea’s first vice foreign minister in Malaysia on the sidelines of the ASEAN summit to discuss regional security and a strengthening of their “indispensable trilateral partnership” in areas such as critical technologies and supply chains, a U.S. State Department statement said. In a joint communique on Friday, ASEAN foreign ministers expressed concern over rising global trade tensions and uncertainties. Without mentioning the U.S., they said unilateral tariffs were “counterproductive and risk exacerbating global economic fragmentation,” echoing a previous statement by ASEAN leaders in May. They also emphasized a need to diversify trade with new and emerging partners and called for a transparent and fair multilateral trading system.
Senate Appropriations panel advances Ag funding measure... The Senate Appropriations Committee advanced its fiscal year (FY) 2026 Agriculture-FDA funding bill with strong bipartisan support, voting 27-0. The Senate’s version notably diverges from the House’s more conservative proposals, particularly in the areas of international food aid and domestic nutrition assistance.
Highlights:
- Food for Peace funding: The Senate bill allocates $1.5 billion to the Food for Peace program, a critical international food assistance initiative. While this represents a reduction from the $1.6 billion enacted for FY 2025, it is significantly higher than the House’s proposed $900 million, thereby avoiding the deep cuts sought by House appropriators.
- WIC program increase: The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) receives a boost to $8.2 billion in the Senate bill, up from $7.6 billion in FY 2025. In contrast, the House bill maintains WIC funding at current levels, opting not to increase support despite rising program needs.