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President Donald Trump signed an executive order Thursday raising tariffs on Canadian imports from 25 to 35 percent, escalating trade tensions between the two countries after Canada announced plans to recognize a Palestinian state, along with other issues.
The new rates take effect Friday, the White House said in a statement, citing Canada’s “continued inaction and retaliation” as the basis for what it described as an emergency measure.
“In response to Canada’s continued inaction and retaliation, President Trump has found it necessary to increase the tariff on Canada from 25% to 35% to effectively address the existing emergency,” the White House said.
According to Trump, there are multiple main reasons for the increased tariffs. First, the president argues that Canada has failed to slow the flow of fentanyl across the northern border. While fentanyl seizures from Canada represent a small portion of total drug imports, the administration has repeatedly raised the issue in recent months.
A second factor involves trade retaliation. U.S. officials have accused Canada of imposing steep tariffs on American agricultural products, including dairy, which Trump argues unfairly burdens U.S. farmers.
Trump has also pointed to the trade imbalance between the two nations. The U.S. trade deficit with Canada is estimated at $63 billion, according to figures cited by the administration.
The president also criticized Canada’s recent recognition of Palestinian statehood, arguing the move undermines trust and stability in ongoing trade talks. The development comes as Israel remains engaged in ongoing military operations in Gaza following a deadly Hamas attack two years ago.
Canadian Prime Minister Mark Carney responded to the announcement by defending Canadian workers and businesses while acknowledging that a trade agreement with the U.S. by Friday was unlikely. Carney has reaffirmed his government’s commitment to continue negotiations, Reuters reported.
Canada has initiated legal action at the World Trade Organization, accusing the U.S. of violating both WTO rules and provisions of the U.S.-Mexico-Canada Agreement (USMCA). Canadian officials argue that the increased tariffs breach commitments made under the trilateral trade deal.