Doubling down on his trade wars, President Trump is threatening to raise taxes on many goods from Canada and punish Brazil for prosecuting his friend.

Canadian Prime Minister Mark Carney responded on Friday to President Donald Trump's threats to impose a 35% tariff on Canada starting Aug. 1, an increase from the initial 25% tariff rate he had set earlier this year.

The announcement came Friday after U.S. President Donald Trump's latest escalation of his tariff threat against Canada.

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.

Canada’s PM Carney rejects Trump’s fentanyl claims amid 35% tariff threat. US-Canada trade talks extended to August 1 as global tariffs escalate.

A day after President Trump announced a new 35 percent tariff on Canadian goods beginning next month, Prime Minister Mark Carney said Canada had made “vital progress” towards stopping fentanyl.