Trump Warns Canada: Back Palestine, Lose Trade Deal

Carney has previously acknowledged that it was unlikely Canada would avoid tariffs altogether, indicating that while a tariff-free agreement was improbable, the size and scope of the tariffs were still under discussion.

The looming 35 percent tariff on Canadian goods entering the United States would be an increase from the current 25 percent level for non‑USMCA compliant imports, which was imposed on Canada over President Donald Trump’s border security concerns related to fentanyl and illegal immigration.

In response, Ottawa has introduced a number of measures, including allocating $1.3 billion for border security and appointing a “fentanyl czar.”

Washington has signaled that it expects more steps to be taken.

Japan and the European Union have signed trade deals with the United States that still include tariffs of up to 15 percent on key exports, such as steel and aluminum.

The UK-U.S. Economic Prosperity Deal, agreed in May, includes a 10 percent tariff on the first 100,000 British cars exported annually to the United States, rising to 25 percent beyond that. UK steel shipments will face no tariffs, avoiding the 25 percent sectoral levy.

Carney said that he had spoken with Palestinian Authority President Mahmoud Abbas and discussed the humanitarian situation in Gaza and a two-state solution.

Canada’s announcement follows similar statements by France and the UK.