US President Donald Trump has warned that Canada’s decision to support Palestinian statehood could hinder efforts to finalize a trade agreement between the two nations, as a critical deadline looms. Canadian Prime Minister Mark Carney announced on Wednesday that Canada intends to recognize the State of Palestine at the United Nations General Assembly in September 2025, aligning with similar moves by France and Britain. This decision has drawn sharp criticism from both Israel and the US, with Trump stating on Truth Social, “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!!!”
Canada and the US are racing to negotiate a trade deal by August 1, 2025, when Trump has threatened to impose a 35% tariff on Canadian goods not covered by the US-Mexico-Canada Agreement (USMCA). Carney described the ongoing tariff negotiations as “constructive” but cautioned that they may not conclude by the deadline. The US has already imposed 25% tariffs on certain Canadian goods, including steel and aluminum, with additional 50% tariffs on these metals and 25% on automobiles, impacting key Canadian industries.
Carney’s announcement follows discussions with British Prime Minister Keir Starmer, who also pledged to recognize Palestinian statehood, contingent on conditions like a ceasefire in Gaza. Carney emphasized that Canada’s support is conditional on the Palestinian Authority committing to reforms, including holding elections in 2026 without Hamas involvement and demilitarizing the Palestinian state. He condemned the humanitarian crisis in Gaza, stating, “The level of human suffering in Gaza is intolerable,” and framed Canada’s move as a step toward preserving a two-state solution.
Trump’s reaction underscores his administration’s view that recognizing Palestinian statehood equates to rewarding Hamas, a stance echoed by a White House official who told Reuters that such recognition would be inappropriate given Hamas’s actions. The US has prioritized other trade deals, with Japan and the UK securing agreements that still include trump-stands-firm-on-tariff-hikes-at-washington-summit/">tariffs of 15% and 10%, respectively. Canada, a top US trading partner exporting about 75% of its goods to the US, faces significant economic risks if no deal is reached.
Carney’s office has not yet responded to Trump’s comments, but the Prime Minister has reiterated his commitment to securing a deal that serves Canadian interests, stating, “We are pursuing a deal that will be in the best interest of Canadians.” As negotiations intensify, Canada is bracing for potential economic fallout while navigating a delicate balance between its foreign policy shift and economic ties with the US.
