Canada’s steel industry fears that Chinese steel facing steep tariffs in the United States will be sent north and overwhelm the Canadian market.

The prime minister pledges to diversify its trading partners away from the US and prioritise the use of Canadian steel.

US President Donald Trump has announced that all imports from Canada will have a 35% tariff as of August 1. He sent a letter to the country’s president, Mark Carney, informing him of the new rate, which has also been posted on his Truth Social account.

President Trump has threatened to increase Mexico’s tariff rate to 30 percent starting Aug. 1, claiming the country hasn’t sufficiently tackled drug cartels.

MSNBC's Lawrence O'Donnell and Jen Psaki discuss the breaking news that Donald Trump is now threatening Canada with tariffs of 35% claiming the "flow of fentanyl" from America's northern neighbor as his reason.

Tariffs—taxes placed on imported goods—are one of the oldest tools in the United States' economic policy arsenal, dating back to the 18th century. Recently they've returned to the spotlight in a big way.

President Donald Trump published a letter to Prime Minister Mark Carney on Thursday, accusing Canada of having "financially retaliated" against the U.S.

The Canadian steel industry had asked the government to introduce tougher anti-dumping measures to protect the domestic industry. U.S. President Donald Trump increased import duties on steel and aluminum to 50% from 25% earlier this month. Canada is the top seller of steel to the United States.