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.

Donald Trump surprised markets late Thursday with a letter announcing a 35% tariff on Canadian goods, but some notable industries such as energy could get some relief from the new threat.

Trump, 79, notified Canadian Prime Minister Mark Carney of the incoming tariffs in a letter – one of dozens the president has fired off to foreign leaders this week ahead of an Aug. 1 deadline for