US President Donald Trump has escalated the trade war with Canada, announcing plans to impose a 35% tariff on all Canadian goods not covered by the US-Mexico-Canada trade agreement. The move comes after Canada backed statehood for Palestine, which Trump called “very hard” to negotiate with.
Trump’s decision is set to impact $349.4 billion in US exports purchased by Canada last year and $412.7 billion in US imports from Canada. Canadian Prime Minister Mark Carney had warned that negotiations were intense but unlikely to conclude by the August 1 deadline.
The tariff hike follows a similar move against steel and aluminum imports from Canada, as well as vehicle exports. The decision also mirrors Trump’s previous rejection of a digital services tax targeting US technology firms after he called it off trade talks.
Carney had announced that Canada planned to recognize Palestine at the United Nations in September, citing “reality on the ground” including starvation in Gaza. However, Israel and the US rejected the comments, with no immediate comment from Carney’s office available.
Source: https://www.reuters.com/world/americas/trump-escalates-trade-war-with-canada-following-palestine-stance-2025-07-31