US President Donald Trump speaks during a bilateral meeting with Britain's Prime Minister Keir Starmer in Scotland, 28 July 2025. Photo: AFP / Pool / Christopher Furlong
US President Donald Trump intensified his trade war with Canada a day ahead of his August 1 deadline for a tariff agreement, saying it would be "very hard" to make a deal with Canada after it gave its support to Palestinian statehood.
Trump is set to impose a 35 percent tariff on all Canadian goods not covered by the US-Mexico-Canada trade agreement if the two countries do not reach an agreement by the deadline.
"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 said on Truth Social.
Canadian Prime Minister Mark Carney previously said tariff negotiations with Washington had been constructive, but the 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 (NZ$592.5 billion) of US goods last year and exported $412.7 billion (NZ$699.9 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.
Canadian Prime Minister Mark Carney. Photo: AFP / Andrej Ivanov
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 as he said on Wednesday (US Time) that his country was planning to recognise 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.
Carney's office did not immediately respond to a request for comment on Trump's post.
Last week, French President Emmanuel Macron said his country would formally recognise a Palestinian state during a UN meeting in September.
The UK also said it plans to recognise Palestinian state in September unless the Israeli government takes substantive steps to end the situation in Gaza and meets other conditions, British Prime Minister Keir Starmer told his cabinet, according to a government statement.
Earlier this month, New Zealand joined 24 other countries in calling for an end to the war in Gaza, and criticising what they called the inhumane killing of Palestinians.
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