Carney says Canada accounts for only 1% of US fentanyl imports
Further to Mark Carney saying Canada is “disappointed” at Trump’s 35% tariff on Canadian goods, the prime minister said the Canadian government “will act to project Canadian jobs, invest in our industrial competitiveness, buy Canadian and diversity our export markets”.
Carney said parts of Canada’s economy including lumber, steel, aluminium and automobiles were heavily impacted by American tariffs but despite the steep levy on US-bound Canadian goods outside of the US-Mexico-Canada trade agreement, Canada remained committed to the deal.
Carney said in his statement that the US had justified its 35% rate on the basis of the cross-border flow of fentanyl, “despite the fact that Canada accounts for only 1% of US fentanyl imports and has been working intensively to further reduce these volumes”.
We will continue working with the United States to stop the scourge of fentanyl and save lives in both our countries.
Carney said Canada was also working internally to “cut down trade barriers to build one Canadian economy”.
Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world.
We can give ourselves more than any foreign government can ever take away by building with Canadians workers and by using Canadian resources to benefit all Canadians.
Here’s Carney’s statement via Bluesky:
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Key events
European stock markets fall
Stock markets across Europe have dropped, after Donald Trump intensified his trade war last night.
Germany’s DAX index has dropped by 1.1% at the start of trading in Frankfurt, while France’s CAC fell by almost 1% and Spain’s IBEX lost 0.6% – even though Europe reached a trade deal with the US at the start of this week.
That, and the 0.5% drop on the London stock market (see here), shows concerns that Trump’s tariffs will weigh on the global economy, weakening trade growth.
FTSE 100 opens lower
London’s stock market has opened in the red, as the City digests Donald Trump’s swathe of tariffs on trading partners.
The FTSE 100 index of blue-chip shares has dropped by over 0.5%, down 50 points at 9082 points.
That’s a fairly mild drop, taking the ‘Footsie’ away from the record high set yesterday, following the modest losses in Asia-Pacific markets earlier.
Tony Sycamore, market analyst at IG, explains:
Market reactions to the newly announced tariffs, have been relatively subdued, largely due to recent trade agreements with the EU, Japan, and South Korea + others that have mitigated their impact.
Mexico’s 90-day tariff reprieve and positive progress on US-China trade talks, as noted by President Trump, further softened the blow.
In the currency markets, the Swiss franc has dipped against the US dollar after Donald Trump imposed a 39% tariff on imports from Switzerland.
The Swiss franc is down 0.15% at 0.813 per dollar.
Trump tariffs: What the analysts say
Financial experts are digesting the new tariff rates announced by the US last night.
Jim Reid, market strategist at Deutsche Bank, points out that the effective US tariff rate is the highest since the 1930s, when the protectionist Smoot–Hawley Tariff Act was in place, exacerbating the Great Depression.
Reid explained:
Welcome to August, which begins with the deadline now having been passed for tariff deals to be concluded with the United States. Much of the rhetoric and the negotiation are now behind us and we’ll now see how the rubber hits the road. The US tariff rate has risen to about 15% from a little over 2% at the start of the year. That’s their highest level since the 1930s but that has not prevented US equities from being near their all-time highs and other markets being much stronger this year.
Michael Brown, senior research strategist at brokerage Pepperstone, points out that the Donald Trump failed to secure many trade deals during the last few months:
Quite apart from the ’90 deals in 90 days’ that the Admin had sought, what we have actually ended up with is 8 deals in 120 days, the details of most remaining fuzzy. That’s called ‘winning’, apparently.
Switzerland ‘continues to strive for a negotiated solution’
Switzerland’s government has said it “notes with great regret” that the White House has announced a higher 39% tariff on Swiss imports to the United States.
In a post on X, the Swiss Federal Council has said “Switzerland has been and continues to be in contact with the responsible authorities in the US,” adding that it “continues to strive for a negotiated solution”.
The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland’s very constructive stance from the outset, the US intends to impose unilateral additional tariffs on imports from Switzerland.
— Bundesrat • Conseil fédéral • Consiglio federale (@BR_Sprecher) August 1, 2025
The government said it would analyse the new situation and decide on how to proceed.
Asia-Pacific stock markets are on track for their worst week since April (the last time Donald Trump announced a flurry of tariffs).
MSCI’s broadest index of Asia-Pacific shares outside Japan has fallen 1.1% today, Reuters reports, bringing its total loss this week to 2.2%. That would be its biggest fall since the week ending on 11 April, after Trump’s ‘Liberation Day’ tariff announcement at the start of April.
Most markets across Asia are still showing losses today.
South Korea’s KOSPI is leading the fallers, down 4%, after Seoul’s government rolled out plans to raise taxes on investors and companies.
China’s CSI300 share index is down 0.75%, even though US Treasury Secretary Scott Bessent said yesterday that Washington and Beijing “have the makings of a deal”, although some details still need to be worked out.
Norway still aims for US trade agreement
Across Europe, politicians are digesting the latest escalation of Donald Trump’s trade war.
Norwegian Minister of Trade and Industry Cecilie Myrseth told public broadcaster NRK this morning that Norway continues to seek a trade agreement with the US, after the White House announced a 15% tariff on its exports.
Carney says Canada accounts for only 1% of US fentanyl imports
Further to Mark Carney saying Canada is “disappointed” at Trump’s 35% tariff on Canadian goods, the prime minister said the Canadian government “will act to project Canadian jobs, invest in our industrial competitiveness, buy Canadian and diversity our export markets”.
Carney said parts of Canada’s economy including lumber, steel, aluminium and automobiles were heavily impacted by American tariffs but despite the steep levy on US-bound Canadian goods outside of the US-Mexico-Canada trade agreement, Canada remained committed to the deal.
Carney said in his statement that the US had justified its 35% rate on the basis of the cross-border flow of fentanyl, “despite the fact that Canada accounts for only 1% of US fentanyl imports and has been working intensively to further reduce these volumes”.
We will continue working with the United States to stop the scourge of fentanyl and save lives in both our countries.
Carney said Canada was also working internally to “cut down trade barriers to build one Canadian economy”.
Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world.
We can give ourselves more than any foreign government can ever take away by building with Canadians workers and by using Canadian resources to benefit all Canadians.
Here’s Carney’s statement via Bluesky:
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Mark Carney ‘disappointed’ at 35% Trump tariffs on Canada
Canadian prime minister Mark Carney has said he is disappointed at Donald Trump raising tariffs from 25% to 35% on Canadian goods outside of the US-Mexico-Canada trade agreement.
More on Carney’s statement in a moment.
Just to recap, Donald Trump signed an executive order on Thursday that would have new tariffs on a large array of US trading partners go into effect in seven days – the next step in his trade agenda that will test the global economy and alliances.
The order was issued shortly after 7pm, the Associated Press reports, and came after a flurry of tariff-related activity in recent days, as the White House announced agreements with various nations and blocs ahead of Trump’s self-imposed deadline of 1 August.
Also on Thursday, Trump announced that he would extend trade negotiations with Mexico for 90 days.
But the vast majority of nations are continuing to face uncertainty ahead of the coming deadline. And while a handful of trade deals have also trickled in, many details remain hazy – with businesses and manufacturers around the world bracing for heightened operating costs and potential price hikes regardless.
In Canada, the mayor of an Ontario city has expressed defiance over the 35% tariffs Donald Trump has imposed on the country and called for people to “buy nothing” from the US.
Carolyn Parrish, mayor of the city of Mississauga, near Toronto, posted on X:
Canada comes of age! 35% tariffs imposed by Trump as of midnight tonight. Time to grow up! Batten down the hatches and expand to new markets. Trade east west. Remove restrictions in our own country. Refine our own oil! Buy nothing from USA. Thank you Trump for a new tomorrow!
Trump on Thursday increased tariffs from 25% to 35% on all products not covered by the US-Mexico-Canada trade agreement.
As reported earlier, the president told NBC News on Thursday he was open to further discussions with Canada, adding that he may even speak with Canadian PM Mark Carney later in the night.
Most Asian currencies slipped to multi-month lows on Friday, with South Korea’s won and Malaysia’s ringgit leading declines, as investors fled riskier regional assets after the US’s sweeping new tariffs.
The won bore the brunt of the selloff, tumbling 0.62% to a two-month low of 1,400.6 against the US dollar, while the ringgit shed 0.5% to hit its weakest level since 23 June 23, Reuters reports.
The broad-based retreat extended across the region, with the Philippine peso, Taiwan dollar and Thai baht all declining more than 0.3% as the tariff fallout rippled through Asian markets.
The MSCI emerging market currency gauge has already fallen well over 1% so far this week, snapping in July from a six-month rally. It fell over 0.3% on Friday.
Malaysia says its revised US tariff rate has been achieved without compromising the nation’s sovereign rights after it stood firm on various “red line” issues.
Malaysia’s trade ministry said on Friday that the positive outcome of the US tariff talks followed sustained engagement between both governments and was a significant achievement of Malaysia’s thorough and methodical negotiating process, Reuters reports.
The US imposed a 19% tariff rate on Malaysia. The ministry said:
We will continue to work closely with relevant ministries, agencies to find ways to mitigate the impact of tariffs on Malaysia’s exports.