The letter is among more than 20 that Trump had posted this week to US trade partners, including Japan, South Korea and Sri Lanka.

Like Canada’s letter, Trump has vowed to implement those tariffs on trade partners by 1 August.

The US has imposed a 25% tariff on all Canadian imports, though there is a current exemption in place for goods that comply with a North American free trade agreement.

It is unclear if the latest tariffs threat would apply to goods covered by the Canada-United States-Mexico Agreement (CUSMA).

Trump has also imposed a global 50% tariff on aluminium and steel imports, and a 25% tariff on all cars and trucks not build in the US.

He also recently announced a 50% tariff on copper imports, scheduled to take effect next month.

Canada sells about three-quarters of its goods to the US, and is an auto manufacturing hub and a major supplier of metals, making the US tariffs especially damaging to those sectors.

Trump’s letter said the 35% tariffs are separate to those sector-specific levies.

“As you are aware, there will be no tariff if Canada, or companies within your country, decide to build or manufacture products within the United States,” Trump stated.

He also tied the tariffs to what he called “Canada’s failure” to stop the flow of fentanyl into the US, as well as Canada’s existing levies on US dairy farmers and the trade deficit between the two countries.

“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 said.

President Trump has accused Canada – alongside Mexico – of allowing “vast numbers of people to come in and fentanyl to come in” to the US.

According to data from the US Customs and Border Patrol, only about 0.2% of all seizures of fentanyl entering the US are made at the Canadian border, almost all the rest is confiscated at the US border with Mexico.

In response to Trump’s complaints, Canada announced more funding towards border security and had appointed a fentanyl czar earlier this year.

Canada has been engaged in intense talk with the US in recent months to reach a new trade and security deal.

At the G7 Summit in June, Prime Minister Carney and Trump said they were committed to reaching a new deal on within 30 days, setting a deadline of 21 July.

Trump threatened in the letter to increase levies on Canada if it retaliated. Canada has already imposed counter-tariffs on the US, and has vowed more if they failed to reach a deal by the deadline.

In late June, Carney removed a tax on big US technology firms after Trump labelled it a “blatant attack” and threatened to call off trade talks.

Carney said the tax was dropped as “part of a bigger negotiation” on trade between the two countries.

The Prime Minister’s office told the BBC they did not have immediate comment on Trump’s letter.

Asia is reeling from Trump’s tariff salvo – is anyone winning?

3 hours ago Share Save Osmond Chia Business reporter, BBC News Reporting from Singapore Share Save

Getty Images President Trump has extended the deadline for tariff negotiations – again

“Deeply regrettable” is how Japanese Prime Minister Shigeru Ishiba has described US President Donald Trump’s latest tariff threat – a 25% levy on Japanese goods. Tokyo, a long-time US ally, has been trying hard to avoid exactly this. It has been seeking concessions for its beleaguered car makers, while resisting pressure to open its markets to American rice. There have been many rounds of negotiations. Japan’s trade minister has visited Washington DC at least seven times since April, when Trump announced sweeping tariffs against friends and foes. And yet, those trips seem to have borne little fruit. Trump’s label for Tokyo moved from “tough” to “spoiled” as talks dragged on. And then this week, Japan joined a list of 23 nations that were sent tariff letters – 14 of those are in Asia. From South Korea to Sri Lanka, many are export-driven manufacturing hubs. On Friday, Trump announced a 35% tariff for goods imported from Canada. The president also said he plans to raise blanket tariffs from 10% to up to 20% on most trade partners, dismissing concerns that further levies could push up inflation. “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” he told NBC News. Countries around the world have until 1 August to strike a deal with the US. But they are likely wondering about their chances given that Japan, a staunch ally that has been openly pursuing a deal, is still facing a steep levy. Trump has reset the tariffs clock – again. So who is winning, and who is losing?

Winner: Negotiators who want more time

In one sense, almost all of the countries targeted by Trump earlier this year benefit from the deadline extension – they now have another three weeks to strike deals. “The optimistic case is that there is pressure now to engage in further negotiations before the 1 August deadline,” said Suan Teck Kin, head of research at United Overseas Bank. Growing economies like Thailand and Malaysia, which received tariff letters this week, will be especially eager to seek a solution. They are also caught in the middle of US-China tensions as Washington targets Chinese exports rerouted through third countries, what are known as transhipped goods. Economists have told the BBC that further extensions are likely, given the complexity of trade agreements. Countries will need time to implement Trump’s demands, which, going by the letters, are not entirely clear, said business lecturer Alex Capri from the National University of Singapore. For instance, transhipped goods have been specifically levied as part of Vietnam’s trade deal with the US. But it is unclear whether that applies to finished goods, or to all imported components. Either way, it will involve far more sophisticated technology to keep track of supply chains, Mr Capri said. “It’s going to be a slow, long-term and evolving process involving many third parties, tech companies and logistic partners.”

Loser: Asian manufacturers

It seems clear that tariffs are here to stay, which makes global trade the loser. Companies from the US, Europe and China with global businesses remain at risk, Mr Capri said. This hurts not just exporters, but also US importers and consumers. And it is a blow for the economic ambitions of large parts of Asia, whose rise has been fuelled by manufacturing, from electronics to textiles.

Getty Images Cambodia’s garment workers rely on an export-driven industry for their livelihood

It is unwise to make zero-sum observations on which countries are winning and losing, Mr Capri added, because international trade, especially between US and China is so deeply inter-linked. Some countries, however, could lose more than others. Vietnam was the first in Asia to strike a deal, but it has little leverage against Washington, and is now facing levies up to 40%. The same goes for Cambodia. A poor country heavily reliant on exports, it has been negotiating a deal as Trump threatens 35% tariffs. South Korea and Japan, on the other hand, may be able to hold out longer, because they are richer and have stronger geo-political levers. India, which too has leverage of its own, has not been issued a letter yet. A deal has seemed imminent but appears to be delayed by key sticking points, including access to the Indian agricultural market and the country’s import rules.

Loser: US-Japan alliance

“Despite its close economic and military relationship with the US, Japan is being treated the same as other Asian trade partners,” said economist Jesper Koll. And that could transform the relationship, especially as Tokyo, with its large financial reserves, appears to be ready for the long game. “Japan has proven to be a tough negotiator and I think that has annoyed Trump,” Mr Koll said. Despite a rice shortage that has sent prices soaring, PM Ishiba has refused to buy US rice, choosing instead to protect domestic farmers. His government has also refused to give in to US demands to increase its military spending.

Getty Images Global businesses like Samsung are in limbo because of Trump’s tariffs

“They are well prepared,” Mr Koll argued. He said the day after Trump announced tariffs in April, Tokyo declared an economic emergency and set up hundreds of consultation centres to assist affected companies. “Japan will be seeking a deal that is credible,” he said, because what’s the guarantee Trump won’t change his mind again? With Japan’s upper-house election due this month, it would be surprising if a deal is agreed by August, Mr Koll said. “No-one is happy. But is this something that is going to force a recession in Japan? No.”

Winner: US or China?

US delays higher tariffs but announces new taxes for some countries

3 days ago Share Save Natalie Sherman Business reporter, BBC News Reporting from New York Osmond Chia Business reporter, BBC News Reporting from Singapore Share Save

Watch: Trump says he’s ‘firm but not 100% firm’ on August tariff deadline

President Donald Trump has officially delayed imposing higher tariffs on US imports, while sending letters to 14 countries including Japan and South Korea detailing the levies they face. The latest development comes as a 90-day pause the White House placed on some of its most aggressive import taxes was set to expire this week. The president renewed his threat of a 25% tax on products entering the country from Japan and South Korea and shared a batch of other letters to world leaders warning of levies from 1 August. Higher tariffs had been set to come into effect on 9 July, having previously been suspended with White House officials saying they would look to strike trade deals.

When asked by a reporter whether the new August date was a hard deadline, Trump said: “I would say firm, but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.” Economist Adam Ahmad Samdin from research firm Oxford Economics told the BBC that the extension came as no surprise since trade agreements often take years to finalise. “Such deals are usually extremely detailed,” he said, adding that although Vietnam became only the second country after the UK to strike an agreement with the US, it was more of a “broad framework” speeding up talks, rather than a full deal. Also on Monday, Trump shared letters addressed to leaders of 14 countries on social media, informing them of his latest tariff plans, while adding that the rates could be modified “upward or downward, depending on our relationship with your country”. Most of the tariff rates in the letters were similar to those outlined in April when he made his “Liberation Day” announcement, threatening a wave of new taxes on goods from various countries. The comments suggested Trump would be open to further trade talks, investment strategist Vasu Menon from OCBC bank said. “The expectations that Trump is once again engaged in a negotiating tactic, rather than making serious tariff threats, offer hope to investors,” Mr Menon said. Trump argues that introducing tariffs will protect American businesses from foreign competition and also boost domestic manufacturing and jobs. But economists say the measures will raise prices in the US and reduce trade. The three main share indexes in the US slipped on Monday, with Toyota’s US-listed shares down 4%. Japan sent more than $148bn (£108.6bn) in goods to the US last year, making it America’s fifth biggest supplier of imports, after the European Union (EU), Mexico, China and Canada, according to US trade data. South Korea was also in the top 10.

Reuters

Besides South Korea and Japan, Trump on Monday set out plans for a 40% tariff on goods from Myanmar and Laos, a 36% tariff on goods from Thailand and Cambodia, a 35% tariff on goods from Serbia and Bangladesh, a 32% tariff on Indonesia, a 30% tariff on goods from South Africa and a 25% tariff on goods from Malaysia and Tunisia.

Japanese Prime Minister Shigeru Ishiba said on Tuesday that his government would continue talks with the US to agree a deal that benefits both countries. “It is deeply regrettable that the US government has announced a further increase in tariffs, in addition to the rates already imposed,” he also said. South Korea said it planned to use the deadline extension to intensify talks with the US. And Thailand’s finance minister said he was confident that his country would be able to reach an agreement to get a tariff rate similar to those imposed to other countries. South Africa’s President Cyril Ramaphosa opposed what he called the “unilateral” higher trade tariffs imposed on his country. White House press secretary Karoline Leavitt said more letters could follow in the days ahead. She disputed the suggestion that the shifting tariff deadlines from 9 July to 1 August might reduce the power of Trump’s threats. “The president’s phone, I can tell you, rings off the hook from world leaders all the time who are begging him to come to a deal,” she said. When the president first announced a raft of steep tariffs in April, turmoil broke out on financial markets, leading to the president suspending some of the highest duties to allow for talks, while keeping in place a 10% levy.

‘Busy couple of days’

Treasury Secretary Scott Bessent said he expected “a busy couple of days”. “We’ve had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals,” he told US business broadcaster CNBC. Trump had initially described his April tariffs as “reciprocal”, claiming they were required to fight back against other countries’ trade rules he saw as unfair to US exports. He has separately announced tariffs for key sectors, such as steel and cars, citing national security concerns, and threatened raise levies on other items, such as pharmaceuticals and lumber. The multi-layered policies have complicated trade talks, with car tariffs a key sticking point in negotiations with Japan and South Korea.

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Reeling from US President Donald Trump’s sudden announcement of unilateral tariffs and their equally swift reversal, Southeast Asian countries are scrambling to respond to heightened uncertainty in global markets as well as ongoing US–China rivalry. Regional states have exhibited an array of tactics to safeguard their interests.

It is too early to predict whether the next four years will prompt Southeast Asia to align more closely with China as a result of an increasingly unpredictable and divided United States. But early moves suggest that rather than making stark choices between the two superpowers, Southeast Asian states are deepening their hedging strategies.

Four elements of hedging distinguish this archetype of strategic behaviour from other forms of alignment, such as bandwagoning (aligning with a threat), balancing (aligning with a third party to oppose a threat) or neutrality across Southeast Asia — blunting, broadening, boosting and binding.

Blunting refers to a state’s efforts to enhance its domestic military capabilities to deter external threats. Blunting may also be referred to as indirect balancing, which is consistent with hedging’s ‘opposite, mutually counteracting measures’ when pursued alongside cooperative behaviour (here: binding).

Blunting may include military modernisation programs, as seen in Singapore’s acquisition of two German Invincible-class submarines to add to its fleet, announced in early 2025. Singapore also purchased eight F-35 jets from the United States to upgrade the Singapore Air Force in 2024, with the jets scheduled to arrive beginning in 2026. While the decision preceded the second Trump term, Singaporean strategists no doubt confirmed their intent to acquire the new fleet with full knowledge that the former US president would return to power.

In mid-April 2025, Vietnam agreed to purchase at least 24 F-16 fighter jets from the United States, despite — or because of — the threat of tariffs and ongoing uncertainty in the US–Vietnam partnership stemming from Trump’s unpredictability. The Trump administration shocked Vietnamese observers when it announced a 46 per cent tariff rate applied to Vietnam, one of the highest in the region.

The second aspect of hedging that sets it apart from more clear-cut types of alignment is broadening, or diversification of a state’s strategic partners. In March 2025, Vietnam upgraded its partnerships with Indonesia and Singapore to the level of comprehensive strategic partnership. Vietnam has added nine new comprehensive strategic partnerships in the past three years, including with Australia, the United States, Japan and South Korea. Broadening its network of strategic partnerships reflects Hanoi’s foreign policy doctrine of diversification and multilateralisation, known in Vietnamese as da dang hoa, da phuong hoa.

Vietnam is not the only country diversifying security ties in Southeast Asia. After the Philippines upgraded nine of its military bases as part of the Enhanced Defense Cooperation Agreement with the United States, the Ferdinand Marcos Jr administration began negotiating visiting forces agreements with New Zealand, Canada and France. This adds to its list of existing visiting forces agreements with Australia and the United States.

Even Cambodia, frequently pilloried as a Chinese client state, has hosted Japanese Self-Defense Force vessels at Ream Naval Base on its southern coast. Ream has attracted international attention since The Wall Street Journal published a story in 2019 alleging that Phnom Penh had signed a secret deal giving Beijing exclusive access to the base.

The third component of hedging is boosting, which refers to the amplification of a state’s interests by internationalising a dispute or speaking up on a particular issue in multilateral forums, where small states are better able to leverage their concerns. The annual Shangri-La Dialogue, hosted by Singapore, has become the preeminent security forum where defence officials from across the region, including the United States and China, come together. Singapore has often used the occasion to urge the great powers to exercise restraint.

The annual ASEAN summit is another forum for regional leaders to voice collective concerns. Southeast Asian anxieties with the Trump administration’s turn toward protectionist trade policies were evident in the May 2025 ASEAN Summit, when the regional bloc expressed ‘deep concern’ with US tariffs.

The final aspect, binding, refers to a hedger deepening ties with a potential security threat — such as China or the United States — in order to bind the larger power to its interests and signal cooperative intent. Binding is distinct from bandwagoning, as a smaller power may utilise binding alongside blunting or internal balancing. Hanoi uses binding via close party-to-party links to ensure a degree of stability in bilateral relations with Beijing and maintain a channel of communication to manage disputes. Vietnam and China have repeatedly relied on direct communication channels to de-escalate tensions in the South China Sea.

Malaysia has also practised binding to mitigate regional tensions and signal its willingness to embrace China’s expanding influence. During Chinese President Xi Jinping’s state visit in April 2025, Malaysian Prime Minister Anwar Ibrahim vowed that his country stood ‘with the Chinese government, for the well-being of our people and for our national economic interests, as well as the overall development and stability of our country’. But Malaysia simultaneously engages in close security cooperation with the United States as part of its overall hedging strategy.

The four ‘Bs’ of blunting, broadening, boosting and binding are useful to identify hedging and illustrate how it is distinct from balancing or bandwagoning. Given heightened uncertainty and instability associated with an erratic United States and ongoing rivalry between Washington and Beijing, Southeast Asian states are utilising the four Bs to deepen their hedging strategies. While hedging is a suboptimal strategy compared to pure balancing, for less powerful states it is a prudent choice that maximises their flexibility in foreign relations for the foreseeable future.

Hunter Marston has a PhD in International Relations from the Coral Bell School of Asia Pacific Affairs, The Australian National University. He is a Southeast Asia Associate at 9DASHLINE and Adjunct Research Fellow at La Trobe University.

The tale of President Donald Trump’s tariffs began on inauguration day in January. It started small, with proposals of 25 percent tariffs on Canada and Mexico, soon extending to China, and eventually every country on the planet. Exact numbers have since increased and decreased, with retaliatory tariffs being put in place by other countries in response. As the back and forth continues, consumers and manufacturers are both left in the lurch to navigate the rapidly shifting landscape of trade, and at the heart of the confusion may be the fashion industry.

According to a report by The Budget Lab at Yale University in April, the Trump administration’s initially proposed tariffs across the board would disproportionately affect clothing and textiles specifically, and consumers can face up to 64 percent higher prices in the short run. In the long run, brands will likely make changes to substitute for cheaper alternatives in their manufacturing processes, but despite the quality of apparel actually going down, clothing prices will continue to stay high, never recovering from the initial price hikes.

While all clothing brands who manufacture products in China are at risk, fast fashion companies—those that seek to rapidly mass produce inexpensive and low-quality clothing in response to quick changing trend cycles—are at the top of mind for many. Over the last five years, Chinese companies Shein and Temu have quickly risen in the ranks of preferred online retailers in the United States. In February alone, the Shein app registered more than one million new downloads on iPhones and iPads, and Shein.com was the number one leading fashion e-commerce store in the United States in 2024. Amidst a laundry list of controversies that surround the site, including abhorrent labor practices, Shein is known for having some of the lowest prices across the globe, and a portion of what made such prices possible was the corporation’s reliance on a “de-minimis” tax exemption, a nearly century-old trade rule that had previously allowed companies in China to ship low-value goods directly to consumers in the United States without taxes.

Earlier this year, however, the Trump administration voided this exemption through an executive order, leading to an end of the process that allowed Chinese e-retailers to keep prices low. In response, Temu even stated that it would stop selling goods from China directly to U.S. customers. “All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” the brand said in a statement, “the move is designed to help local merchants reach more customers and grow their businesses.” Shein also raised prices of products considerably, with a survey by the Washington Post showing that prices across the site were increased by an average of 43 percent.

The quickly shifting and unpredictable nature of the Trump administration’s policy-making has resulted in back and forth changes in tariff rules, with the latest being another rollback. After recent negotiations between the United States and China, the president has lowered the tariffs on low-value goods from 120 percent to 54 percent, and the United States will lower tariffs on imported Chinese goods from 145 percent to 30 percent, while China’s retaliatory tariffs on U.S. goods will drop from 125 percent to 10 percent. Whether these numbers will stay as they are is yet to be seen.