Trump has justified tariffs on goods from Canada, the top U.S. export market, by accusing it of failing to stop the cross-border flow of fentanyl, even though U.S. government data shows Canada accounts for only 1% of the fentanyl that enters the United States.

Because of the USMCA exemption, the effective tariff rate on US imports of Canadian goods was around 5%, according to estimates published July 30 by the Bank of Canada. That will now rise slightly. Economists at Bank of Nova Scotia estimated recently that the effective tariff rate would be between 6% and 7%.

President Donald Trump says Canada’s announcement it'll recognize a Palestinian state “will make it very hard” for the U.S. to reach a trade agreement with it.