WASHINGTON / OTTAWA – U.S. President Donald Trump sharply escalated trade tensions with Canada after Canadian Prime Minister Mark Carney announced plans to recognize a Palestinian state at the United Nations in September, warning that the move would make a trade agreement “very hard” to achieve.
Trump took to Truth Social to announce:
“Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them.”
Following this message, the Trump administration issued an executive order raising tariffs on Canadian imports not covered by the US–Mexico–Canada Agreement (USMCA) from 25% to 35%, effective August 1.
Prime Minister Carney affirmed Canada’s commitment to recognizing Palestinian statehood while reinforcing conditions such as democratic elections without Hamas participation. He labelled Trump’s tariff hike “disappointing” and signalled a focus on strengthening domestic consumption and diversifying export markets.
Carney had previously engaged in what he described as “constructive” trade talks with Washington, but acknowledged a full agreement removing all tariffs was unlikely by the deadline.
This move is part of a broader Trump-era strategy linking trade pressure to geopolitical issues. His administration has similarly imposed tariffs on Brazil, India, and Mexico over unrelated policy disagreements. The conflation of Canada’s foreign policy shift with trade negotiations introduces fresh complexity into North American relations and global diplomacy.
Canada remains the U.S.’s second-largest trading partner, importing $412.7 billion in goods and buying $349.4 billion in U.S. exports last year. Steel, aluminium, lumber, and automobiles are among the sectors directly affected by the new tariffs.
With the August 1 tariff deadline passed and negotiations stalling, both sides face rising national pressure. Canada is pursuing internal strategies to boost domestic resilience and reduce reliance on the U.S., while the U.S. doubles down on using economic leverage over strategic choices in foreign policy.
Source: Local News Agencies
