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 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.

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

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.

Prime Minister Mark Carney says U.S. President Donald Trump has multiple objectives in his trade talks with various countries, including how it will impact the U.S. budget.