President Donald Trump said the U.S. will increase its tariff rate on Canadian goods to 35% starting next month. An outline of a trade deal with the European Union is close to being finished, a spokesman for the bloc said Friday,

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.

President Donald Trump announced a new set of duties on goods that were not covered by an existing sectoral tariffs in place against Canada.