The 15% tariff would be lower than previously threatened, but it would remain a high duty on America’s largest trading partner.

With talks at a standstill, a new U.S. tariff threat raises economic tensions as Canada faces a potential 35% penalty outside key trade protections.

Trump’s tariffs on Canadian steel and aluminum, autos and goods not covered by the U.S.-Mexico-Canada trade agreement have upended the status quo. He has threatened to raise some of those tariffs to 35 percent by Aug. 1. Canada sends more than 75 percent of its exports to the U.S.