Tensions between the U.S. and Canada are escalating after President Donald Trump linked trade talks to Ottawa’s recognition of Palestinian statehood, threatening steep new tariffs if no deal is reached by 1 August.
Trump is set to impose a 35% tariff on all Canadian goods not covered by the U.S.-Mexico-Canada trade agreement if the two countries do not reach an agreement by the deadline.
The warning comes after Canada expressed support for Palestinian statehood, a move Trump called a major obstacle to trade negotiations.
“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 posted on Truth Social.
Canadian Prime Minister Mark Carney had earlier described tariff negotiations as 'constructive' but acknowledged that a final deal may not be achieved before the deadline.
Canada remains the second-largest U.S. trading partner and its top buyer of exports, purchasing $349.4 billion in U.S. goods last year. However, it continues to face tariffs on steel, aluminium, and vehicle exports.
In a move seen as an olive branch last month, Canada dropped its digital services tax targeting U.S. tech firms. Still, Trump had already walked away from trade talks, labeling the tax a "blatant attack."
Carney joined France and Britain this week in declaring plans to recognize a Palestinian state at an upcoming United Nations meeting in September, citing the dire humanitarian crisis in Gaza.
“Canada condemns the fact that the Israeli government has allowed a catastrophe to unfold in Gaza,” Carney said.
Both the U.S. and Israel criticized his remarks. Carney’s office has not responded to Trump’s latest comments.
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Here's your AnewZ Daily Brief for 18 September 2026. These are the top five stories making headlines in the field of science.
The U.S. State Department approved a potential $2.7 billion military sale to Ukraine for air-defence development upgrades, along with related equipment and services, the department said in a congressional notification late on Friday.
U.S. President Donald Trump announced an agreement with Denmark and Greenland on Friday that would significantly expand Washington’s military presence on the Arctic island and give the United States what he described as permanent authority over its security.
The European Union will disburse €3.3 billion ($3.8 billion) to Ukraine for missiles and drones, European Commission President Ursula von der Leyen said after a phone call with Ukrainian President Volodymyr Zelenskyy.
Russia’s first State Duma election since the full-scale invasion of Ukraine is testing the country’s political system as voters choose a new parliament amid wartime and economic pressures.
From Russia’s parliamentary election and Germany’s regional votes to the U.S. midterms, several major elections are taking place in September and November of 2026. Meanwhile, Sweden has already voted, with parties now negotiating to form a new government.
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