Canada is one of the United States' top trading partners, with more than $410 billion of goods crossing into the country last year.

President Donald Trump has announced he’s levying tariffs of 30% against the European Union and Mexico starting Aug. 1

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.

The letter reiterated Trump’s complaints about dairy quotas, fentanyl and the U.S. trade deficit, which is mostly fueled by American refineries’ thirst for Canadian oil. His social media post caused the Canadian dollar to immediately tumble, indicating the market wasn’t expecting this escalation.

If implemented, Trump's new 35 percent duties will be "separate from all Sectoral Tariffs," such as the 50 percent tariff on steel and aluminum imports. Trump also promised that, if Canada raises its own tariffs in response, then "whatever number [Canada chooses] to raise them by, will be added onto the 35% that [the U.S. charges]."

Brazil's government on Friday downplayed the impact of the 50% tariff U.S. President Donald Trump threatened to impose on imports from that country, as leaders from both nations expressed a cautious willingness to negotiate in the future.

President Donald Trump’s threat to boost import taxes by 50% over Brazilian goods could drive up the cost of breakfast in the United States.