Trump Threatens 35% Tariff on Canada Over Palestinian Statehood Support
President Donald Trump escalated tensions with Canada on Wednesday, announcing that it would be “very hard” to reach a trade agreement after Canada publicly supported the recognition of Palestinian statehood. The move comes just a day before Trump’s self-imposed August 1 deadline for a new tariff deal with Canada.
If no agreement is reached, the U.S. will impose a sweeping 35% tariff on all Canadian imports not covered by the U.S.-Mexico-Canada Agreement (USMCA). The warning was delivered via Truth Social, where Trump reacted sharply to Canada’s announcement.
“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,” he posted.
Canadian Prime Minister Mark Carney had earlier described talks with Washington as “constructive,” though he admitted that a full deal to remove all tariffs was unlikely before the deadline. Trade negotiations were said to be in an intense phase.
Canada remains a critical U.S. trading partner. In 2024, it was the largest buyer of American exports at $349.4 billion and sent $412.7 billion worth of goods to the U.S. It is also the top supplier of steel, aluminum, and vehicles—all of which are facing American tariffs.
Adding to the tension, Carney’s government recently dropped a planned digital services tax on U.S. tech firms following pressure from Trump.
On Wednesday, Carney announced Canada’s intention to recognize Palestinian statehood during a U.N. meeting in September, citing the humanitarian crisis in Gaza. “Canada condemns the fact that the Israeli government has allowed a catastrophe to unfold in Gaza,” Carney said. The statement drew sharp criticism from both Israel and the U.S.
Trump’s remarks signal a deeper fracture in the U.S.-Canada alliance, with trade, diplomacy, and global policy now intertwined in a volatile election-year landscape.
U.S. President Donald Trump escalated tensions with Canada on Wednesday, declaring that it would be “very hard” to reach a trade agreement after Canada publicly supported the recognition of Palestinian statehood. The move comes just a day before Trump’s self-imposed August 1 deadline for a new tariff deal with Canada.
If no agreement is reached, the U.S. will impose a sweeping 35% tariff on all Canadian imports not covered by the U.S.-Mexico-Canada Agreement (USMCA). The warning was delivered via Truth Social, where Trump reacted sharply to Canada’s announcement. “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,” he posted.
Canadian Prime Minister Mark Carney had earlier described talks with Washington as “constructive,” though he admitted that a full deal to remove all tariffs was unlikely before the deadline. Trade negotiations were said to be in an intense phase.
Canada remains a critical U.S. trading partner. In 2024, it was the largest buyer of American exports at $349.4 billion and sent $412.7 billion worth of goods to the U.S. It is also the top supplier of steel, aluminum, and vehicles—all of which are facing American tariffs.
Adding to the tension, Carney’s government recently dropped a planned digital services tax on U.S. tech firms following pressure from Trump. On Wednesday, Carney announced Canada’s intention to recognize Palestinian statehood during a U.N. meeting in September, citing the humanitarian crisis in Gaza. “Canada condemns the fact that the Israeli government has allowed a catastrophe to unfold in Gaza,” Carney said. The statement drew sharp criticism from both Israel and the U.S.
Trump’s remarks signal a deeper fracture in the U.S.-Canada alliance, with trade, diplomacy, and global policy now intertwined in a volatile election-year landscape.
