Trump Hikes Canadian Tariffs To 35%, Links Move To Ottawa’s Stance On Palestine

Last Updated:August 01, 2025, 07:19 IST

The announcement came despite Canadian Prime Minister Mark Carney’s reported outreach ahead of the August 1 deadline

US increases tariff to take on Canada.

US President Donald Trump on Thursday signed an executive order raising tariffs on Canadian goods not covered by the US-Mexico-Canada Agreement (USMCA) from 25% to 35%, escalating a months-long tariff standoff with America’s northern neighbour. According to a White House fact sheet, goods rerouted through other countries to bypass the new tariffs will face a transhipment levy of 40%.

The White House linked the latest tariff hike in part to what it called Canada’s “continued inaction and retaliation," particularly its alleged failure to curb fentanyl smuggling into the United States and also recognising Palestine as a separate state. While Canadian officials maintain that only a small fraction of fentanyl entering the US originates in Canada, and that border enforcement has already been strengthened, Trump has continued to press for more aggressive action.

The announcement came despite Canadian Prime Minister Mark Carney’s reported outreach ahead of the August 1 deadline, with Trump claiming no conversation had taken place. Carney, who previously stated that talks were constructive but unlikely to meet the deadline, must now weigh options as provincial leaders are divided on strategy. Ontario Premier Doug Ford has called for a 50% counter-tariff on U.S. steel and aluminium, stating, “Canada shouldn’t settle for anything less than the right deal… We need to stand our ground."

Trump, while noting he “loves Canada," accused the country of treating the U.S. “very badly for years." U.S. Commerce Secretary Howard Lutnick added that the tariffs could be reconsidered “if Carney starts turning on the charm and if he takes off his retaliation."

Meanwhile, Trump has offered Mexico a 90-day reprieve to reach a trade deal, but non-USMCA-compliant exports will still be hit with a 25% duty. With 75% of Canadian exports heading to the U.S., the tariff hike, impacting sectors like steel, aluminium, and auto manufacturing, adds significant pressure on Ottawa. Still, Canadian officials noted that USMCA compliance has risen sharply, and export diversification efforts have helped mitigate the damage. Government data shows the U.S. share of Canadian exports fell from 78% to 68% between May 2024 and May 2025.

News world Trump Hikes Canadian Tariffs To 35%, Links Move To Ottawa’s Stance On Palestine

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