Trump makes dramatic move on trade war with Canada over Palestine

President Donald Trump signed an executive order Thursday that would have new tariffs on dozens of U.S. trading partners to go into effect in seven days. 

Trump is set to impose a 35 percent tariff on all Canadian goods not covered by the US-Mexico-Canada trade agreement if he and Canadian Prime Minister Mark Carney cannot make a deal by his August 1 deadline.

But Trump warned in a late night Truth Social post it would be 'very hard' to make a deal with Canada if Carney proceeds with his intention to recognize Palestine. 

'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,' Trump wrote.

Trump's 35 percent tariff was announced amidst a string of surprise modifications to his reciprocal tariffs on Thursday.

His executive order was issued shortly after 7 p.m. It came after a flurry of tariff-related activity in recent days, as the White House announced agreements with various nations and blocs ahead of Trump´s self-imposed Aug. 1 deadline. 

Trump had already secured about a dozen deals, with a mix between formal signed agreements and announced frameworks. 

But it was still far short of the '90 deals in 90 days' touted by Trump trade advisor Peter Navarro back in April. 

He has been using changing deadlines – and the threats of high U.S. tariffs he has announced publicly – to try to leverage the opening of foreign markets while bringing down the tariffs paid on imports.

To sell the push to Americans, he has been touting new tariff revenues, with $150 billion collected in July, while floating new rebate checks.

As per the new levies, Switzerland has been hit with a 39 percent tariff, Syria was lobbed a 41 percent tariff, Laos and Myanmar each received a 40 percent tariff and Iraq and Serbia joined Canada with a 35 percent tariff.

Algeria, Bosnia and Herzegovina, Libya and South Africa all were handed 30 percent tariffs.

Ontario's Premier Doug Ford on Thursday night slammed Trump's higher tariff for Canada, describing it as 'concerning.'

'Canada shouldn’t settle for anything less than the right deal. Now is not the time to roll over. We need to stand our ground,' he said.

'We need to do everything in our power to protect workers, businesses and communities from the impact of tariffs.'

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Ford has urged Carney to 'hit back with a 50 per cent tariff on U.S. steel and aluminum. 

'Canada has what the United States needs: oil and gas, critical minerals, steel and aluminum, electricity, potash and uranium,' he said.

'We’re America’s number one customer and keep millions of Americans working. The federal government needs to maximize our leverage and stand strong in the face of President Trump’s tariffs.'

Trump has repeatedly warned nations against increasing their own tariffs and said doing so will force him to raise his own tariffs accordingly. 

Several countries have come out on top with Trump's revised tariffs, with Angola's tariff dropping from 32 percent to 15 percent, and Cambodia's plummeting from 49 percent to 19 percent.

The Falkland Islands, Lesotho, Madagascar and Mauritious have also enjoyed heavily reduced tariffs.

Carney previously said tariff negotiations with Washington had been constructive, but that talks may not conclude by the deadline.

Talks between the two countries were at an intense phase, he added, but a deal that would remove all US tariffs was unlikely.

Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. 

It bought $349.4 billion of US goods last year and exported $412.7 billion to the US, according to US Census Bureau data.

Canada is also the top supplier of steel and aluminum to the United States, and faces tariffs on both metals as well as on vehicle exports.

Last month, Carney's government scrapped a planned digital services tax targeting US technology firms after Trump abruptly called off trade talks saying the tax was a 'blatant attack.'

Carney followed France and Britain on Wednesday when he said his country was planning to recognize the State of Palestine at a meeting of the United Nations in September.

In announcing the decision, Carney spoke of the reality on the ground, including starvation in Gaza.

'Canada condemns the fact that the Israeli government has allowed a catastrophe to unfold in Gaza,' he said.

Israel and the United States, Israel's closest ally, both rejected Carney's comments.

He convened a Cabinet meeting to discuss the situation in the battered Palestinian territory. 

Carney was inspired to make a change after discussing the crisis with British Prime Minister Keir Starmer, who announced a similar move on Tuesday.

Scenes of hunger and starvation have trickled out of Gaza amid a longstanding Israeli blockade which is preventing supplies from entering the territory en masse.

And it hasn't gone unnoticed by Trump himself. 

He is sending his top lieutenants in the Middle East - special envoy Steve Witkoff and Ambassador to Israel Mike Huckabee - to Gaza on Friday to inspect food deliveries. 

White House press secretary Karoline Leavitt shared the updates on Thursday, detailing that Witkoff and Huckabee had a 'very productive meeting' with Israel's Prime Minister Benjamin Netanyahu earlier in the day.

On Tuesday, as the president traveled back from Scotland after spending time at his two golf resorts and meeting several world leaders, Trump hinted that Melania Trump may have played a role in his evolution on Gaza.

'She thinks it's terrible,' Trump told reporters. 'She sees the same pictures that you see. And that we all see. And I think everybody - unless they're pretty cold-hearted or, worse than that, nuts.'

'There's nothing you can say other than it's terrible,' the president continued. 'When you see the kids. And those are kids - whether they talk [about] starvation or not - those are kids that are starving. They are starving.' 

'The level of human suffering in Gaza is intolerable,' Carney said.

'Canada intends to recognize the State of Palestine at the 80th Session of the United Nations General Assembly in September 2025.'

Carney said the intention is predicated on the Palestinian Authority 'holding general elections in 2026 in which Hamas can play no part, and to demilitarize the Palestinian state.'

Pressure to formally recognize Palestinian statehood has mounted since French President Emmanuel Macron announced that his country will become the first major Western power to do so in September.

As with France and the U.K., Canadian recognition would be largely symbolic, but it's part of a broader global shift against Israel and could increase diplomatic pressure for an end to the conflict.

More than 140 countries recognize a Palestinian state, including a dozen in Europe. 

Macron's announcement last week made France the first Group of Seven country - and the largest in Europe - to take that step.

Canada has long supported the idea of an independent Palestinian state existing alongside Israel, but has said recognition should come as part of a negotiated two–state solution to the conflict.