In a Week Where the Trade Wars Came Back into Focus, Trump Adds Canada and Brazil to Tariff Threat List.

Though details are thin for now, President Trump is threatening Canada (35%) and Brazil (50%) with big tariff rates beginning August 1. That could have a large impact on fuel and agriculture trade.

President Donald Trump returned to the trade war battlefield this week in a big way, releasing tariff rates for numerous countries to be imposed August 1, 2025. Trump announced a 35% tariff rate for imports from Canada and a 50% rate for Brazil. Both are major trading partners with the U.S., and tariffs could have significant impact on both imports and exports.

Canada and the U.S. have a robust agricultural trade. Canadian imports to the U.S. exceed U.S. exports to Canada:

U.S. Department of Agriculture (USDA) Economic Research Service (ERS) researchers found that rapeseed oil or “canola” ($4.8 billion), biscuits and wafers ($4.7 billion), beef and beef variety meats ($3.0 billion), cocoa and cocoa preparations ($2.0 billion), frozen potatoes ($1.6 billion), and pork and pork variety meats ($1.2 billion) made up the largest share of Canadian agriculture imports in 2023.

ERS reports that rains, fruit, vegetables, and meat made up 63.7% of U.S. agriculture exports to Canada in 2023. Largest agriculture export volumes to Canada are ethanol ($1.6 billion), dog and cat food ($1.2 billion), beef ($878 million), pork ($864 million), and corn ($671 million).

Brazil, on the other hand, is not a major market for U.S. agriculture exports. Brazil does supply the U.S. with $2.4 billion in coffee, $1.3 in fruit (primarily orange juice), $1 billion in meat products, and $1 billion sweeteners. Brazil also exported 650,000 barrel-equivalents of ethanol to the U.S. in 2024.

Beyond agriculture, Canada supplies the U.S. with $130.2 billion in fuels and oils, $52.9 billion in vehicle sales, and $32.3 billion in machinery sales. Brazil’s largest export to the U.S. is crude oil, with the U.S. supplying refined petroleum back to Brazil at roughly the same value ($5 billion).

Some exceptions are likely for Canada, such fuel and agriculture goods, due to exemptions through the USMCA (the U.S. Mexico Canada Agreement, the updated version of the North American Free Trade Agreement Trump negotiated during his first term).

Trump’s apparent rationale for the Canadian and Brazilian tariffs are for very different reasons.

With respect to Canada, Trump wrote in the letter: “I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers.”

Trump is threatening Brazil with the 50% tariff rate for political reasons. Brazil is prosecuting Jair Bolsonaro, its former president and a Trump ally, for attempting a coup when he lost his re-election bid in 2022. Trump called the Bolsonaro prosecution an “international disgrace.”

The chaotic nature of Trump’s approach to trade “negotiations” is likely to continue through the end of the month. It is not clear what the proposed rates will mean to the U.S. economy, nor whether the new tariffs will actually be implemented. Trump and the Republicans are also cutting domestic spending and terminating many industrial and economic development funding programs enacted during the Biden presidency.

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