Investors have so far behaved as if they’re counting on the U.S. president to back down, having seen previous U-turns from his administration.

In a letter released on his social media platform, Donald Trump told Canadian Prime Minister Mark Carney the new rate would go into effect on August 1 and would go up if Canada retaliated.

Canada became the latest country to be slapped with increased tariffs by the Trump administration on Thursday. Starting August 1,

President Trump on Thursday threatened to impose 35% tariffs on goods from Canada starting next month, hiking import duties on one of the U.S.'s largest trading partners.

President Donald Trump has posted two new letters on his social media platform announcing tariffs on the European Union and Mexico.

The president said the blanket 35% would be on top of tariffs on certain sectors. That’s higher than the previous 25% rate.

On Thursday, the president announced a 35 percent tariff on all Canadian goods not covered by the United States-Mexico-Canada Agreement (USMCA) to take effect on August 1, unless a trade deal is reached before then.

Trump’s move deepens a rift between two North American countries that have suffered a debilitating blow to their decades-old alliance.