President Donald Trump has made good on his threat to increase tariffs on Canadian goods from 25% to 35%. The new rate goes into effect today, which was the deadline for Canadian and American negotiators to reach a deal. But a new wrinkle may have pushed the president over the edge. On Wednesday, Prime Minister Mark Carney said Ottawa would recognize Palestinian statehood during the UN General Assembly in September, under certain conditions.
The new rate of 35%, according to the White House, comes in response to Canada’s continued inaction and retaliation, and because of that, Trump found it necessary to increase the tariffs. The president was asked about Ottawa’s intention to recognize a Palestinian state.
“No, I didn’t like what they said. But that’s their opinion. I didn’t like that,” Trump said. “Not a deal breaker. But we haven’t spoken to Canada today. He’s called, and we’ll see.”
Prime Minister Carney, for his part, suggested Canada could no longer stand by while the situation in Gaza continues.
“The level of human suffering in Gaza is intolerable,” Carney said. “And it’s rapidly deteriorating.”
Carney has described the talks as complex and intense and said his team would continue to negotiate beyond today’s deadline, if necessary, in order to reach the best deal possible for Canadians. He also said a deal that would remove all US tariffs is unlikely. Carney has some big-name politicians on his side, people like Ontario Premier Doug Ford, who is taking a tough line with Trump’s tariffs.
“With President Trump taking direct aim at our economy. His goal is to take every single business out of our country, out of our province. And bring it down to the US,” Ford said. “I will fight like I’ve never fought before, and we’re going to continue fighting against President Trump and his radical views.”
Ford said he’s told Carney to hit Trump back as hard as possible on trade and not to roll over in trade negotiations. And Carney has the support of Canada’s biggest private sector union, UNIFOR. It’s president Lana Payne said Doug Ford has it right.
“Well, we can’t roll over. That’s not an option here. In this moment, we are much better off having no deal than a bad deal. And I agree with Doug Ford, we’ve got to punch back hard,” Payne said. “You know we can’t roll over because what will happen is that the appetite for concessions from this president will continue to grow. And so there has to be a line in the sand. And Canada actually is one of the few nations with leverage here, and we’re going to need to use it.”
There has been no indication from Ottawa, yet, that it will retaliate against the 35% tariffs. Those tariffs only affect goods not covered by the U.S.-Mexico-Canada trade agreement. U.S. Commerce Secretary Howard Lutnick has said the president could reconsider the tariffs if Carney turns on the charm and backs away from any retaliation.
