Our northern neighbor may appear nice. But they aren’t willing to stay in their lane.
Now Trump heaved a massive threat at Canada for trying to undermine him.
Trump Warns Canada’s Palestinian Stance Jeopardizes Trade Deal
President Donald Trump warned on July 31, 2025, that Canada’s decision to support Palestinian statehood severely complicates prospects for a new trade agreement, emphasizing America’s strategic priorities.
In a Truth Social post, he stated, “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.”
With an August 1 deadline looming, Trump plans to impose a 35% tariff on Canadian goods not covered by the US-Mexico-Canada Agreement (USMCA) if no deal is reached.
His firm stance underscores his commitment to aligning trade partnerships with U.S. interests, particularly support for Israel, positioning America as a strong leader in global negotiations.
Canada’s Policy Shift Fuels Tensions
On July 30, Canadian Prime Minister Mark Carney announced Canada would recognize Palestinian statehood at a September UN meeting, contingent on elections and other conditions.
Carney cited the Gaza humanitarian crisis, stating, “Canada condemns the fact that the Israeli government has allowed a catastrophe to unfold in Gaza,” and called a two-state solution “no longer tenable” due to Hamas terrorism, Israeli settlements, and settler violence. France and Britain made similar announcements this week.
Trump’s supporters view Canada’s move as a slight against U.S. ally Israel, complicating trade talks.
By linking trade to foreign policy, Trump leverages America’s economic power to reinforce its geopolitical priorities, a tactic proven effective in recent deals with Mexico, the EU, and others.
High Stakes in U.S.-Canada Trade Relations
Canada is the U.S.’s top export market and second-largest trading partner, with $412.7 billion in goods exported to the U.S. and $349.4 billion imported in 2024, per Reuters. Despite the USMCA, Canada faces U.S. tariffs on steel, aluminum, and vehicles.
Trump’s proposed 35% tariff, up from a 25% fentanyl-related tariff, could disrupt this vital economic relationship.
His recent successes, including a 90-day USMCA extension with Mexico and trade agreements with the EU, UK, and Japan, highlight his ability to secure favorable terms.
With a strong economy—3% GDP growth last quarter and inflation at 3.2% in June 2025—Trump’s hardline approach strengthens America’s global standing, pressing Canada to align with U.S. priorities or face economic consequences.
