Canada and the US are working on negotiating a trade deal by August 1, with Trump threatening a 35% tariff on Canada.
United States President Donald Trump has said it will be difficult to make a trade deal with Canada after it announced that it would back Palestinian statehood, following the examples of the United Kingdom and France amid growing international condemnation of Israel’s war on Gaza.
“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. Oh’ Canada!!!” Trump wrote on his social media platform Truth Social on Thursday. Canadian Prime Minster Mark Carney’s office did not immediately respond to a request for comment.
Trump’s post comes a day after Carney announced that Canada is planning to recognise the State of Palestine at the 80th session of the United Nations General Assembly in September if certain conditions are met, following recent announcements by France and the UK.
Canada and the US are working on negotiating a trade deal by August 1, the date Trump is threatening to impose a 35 percent tariff on all Canadian goods not covered by the US-Mexico-Canada trade agreement.
Carney said on Wednesday that tariff negotiations with Trump’s administration have been constructive, but the talks may not conclude by the deadline.
Carney said recognising Palestinian statehood was necessary to preserve hopes of a two-state solution to the Israeli-Palestinian conflict, a longstanding Canadian goal that was “being eroded before our eyes”.
The prime minister said the worsening suffering of civilians in Gaza left “no room for delay in coordinated international action to support peace”.
However, Carney caveated the decision by saying that Canada’s intention was “predicated on the Palestinian Authority’s commitment to much-needed reforms”, referring to the body led by President Mahmoud Abbas, which has civil authority in parts of the Israeli-occupied West Bank.
Carney added that Abbas would have to “hold general elections in 2026 in which Hamas can play no part, and to demilitarise the Palestinian state”, if Canada were to go ahead with recognition of this state.
Canada following UK, France moves
The US has rejected moves to recognise a Palestinian state, saying the policy rewards Hamas. The Trump administration has been uncompromising in its support for Israel, despite accusations by UN experts and rights groups that the US ally is committing a genocide against Palestinians.
The Israeli military has killed more than 60,000 Palestinians in Gaza and flattened most of the territory since the start of the war in 2023.
The increased number of Palestinians dying of starvation – now at least 154 people, including 89 children – and the hundreds killed at US- and Israeli-backed aid distribution sites has raised global condemnation of Israel.
Trump himself has said that starvation was clearly taking place in Gaza, despite Israeli denials. His Middle East envoy Steve Witkoff is expected to arrive in Israel on Thursday for ceasefire and aid talks.
With Wednesday’s announcement, Carney positioned Canada alongside France, after President Emmanuel Macron said his country would formally recognise a Palestinian state during the same UN meeting.
The Israeli embassy in Ottawa said “recognising a Palestinian state in the absence of accountable government, functioning institutions, or benevolent leadership, rewards and legitimises the monstrous barbarity of Hamas on October 7, 2023”.
The PA’s Abbas welcomed the announcement as a “historic” decision, while France said the countries would work together “to revive the prospect of peace in the region”.
Canada’s plan goes a step further than this week’s announcement by British Prime Minister Keir Starmer.
Starmer said the UK will formally recognise the State of Palestine in September unless Israel takes various “substantive steps”, including agreeing to a ceasefire in Gaza.
Carney stressed that Canada has been an unwavering member of the group of nations that hoped a two-state solution “would be achieved as part of a peace process built around a negotiated settlement between the Israeli government and the Palestinian Authority”.
“Regrettably, this approach is no longer tenable,” Carney said, citing “Hamas terrorism” and the group’s “longstanding violent rejection of Israel’s right to exist”, highlighting his attempt to caveat his criticism of Israel’s actions with condemnation of Hamas.
The peace process has also been eroded by the expansion of Israeli settlements across the occupied West Bank and East Jerusalem, Carney said.
The prime minister said a two-state solution was growing increasingly remote, with a vote in Israel’s parliament “calling for the annexation of the West Bank”, as well as Israel’s “ongoing failure” to prevent a humanitarian catastrophe in Gaza.
He framed his decision as one aimed at safeguarding Israel’s future.
“Any path to lasting peace for Israel also requires a viable and stable Palestinian state, and one that recognises Israel’s inalienable right to security and peace,” Carney said.
