The combined U. S. trade deficit with USMCA trade partners Mexico and Canada now exceeds the U.S. deficit with China, according to government data released Thursday.

While exports to the U.S. were down, trade to other countries was up. Canada sent 30.1 per cent more unwrought gold, silver and platinum group metals to other countries, including the United Kingdom, for example, and 13.3 per cent more meat products to Japan.

Trump, 79, notified Canadian Prime Minister Mark Carney of the incoming tariffs in a letter – one of dozens the president has fired off to foreign leaders this week ahead of an Aug. 1 deadline for

Canada's trade deficit in May narrowed after a record-breaking deficit in April as total exports rose and imports fell even as the impact of U.S. tariffs dented shipments south of the border, data showed on Thursday.

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.

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.

Helped by volatile gold shipments, the May deficit was down from a record in April and continued to reflect fluctuating tariff policy in Canada’s biggest trade partner and neighbor.

The federal deficit, now estimated at a staggering $92 billion by the C.D. Howe Institute, has ballooned to levels that can no longer be ignored.

One of the largest departments in the Canadian government told employees they may face job losses as Prime Minister Mark Carney searches for spending cuts to keep the budget deficit contained.

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.