Trump Warns Trade Deal With Canada at Risk After Ottawa Joins UK and France in Backing Palestinian Statehood
US President Donald Trump has warned that a new trade deal with Canada may collapse after Prime Minister Mark Carney announced Canada’s support for Palestinian statehood, following similar moves by the United Kingdom and France. Trump made the remarks on Truth Social, calling Canada’s decision a setback for bilateral negotiations.
“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 posted on Thursday.
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The UK and France have already signaled parallel intentions.
Trump’s post came as talks over a US-Canada trade deal approached a crucial August 1 deadline. Washington is threatening to impose a 35% tariff on all Canadian exports not covered by the existing US-Mexico-Canada Agreement (USMCA).
Carney has acknowledged that while discussions remain constructive, a final deal may not be reached before the deadline.
Canada’s recognition of Palestine, Carney said, was “a necessary step to revive the possibility of a two-state solution” amid what he described as the collapse of the peace process. He cited Israel’s military campaign in Gaza and growing civilian casualties as justification for urgent international action.
The announcement is conditional on Palestinian Authority reforms. Canada demands that elections be held in 2026 without Hamas participation and that the future Palestinian state be demilitarised. Abbas welcomed Canada’s stance as a “historic” development.
Meanwhile, the Trump administration continues to reject all attempts to recognise Palestinian statehood. It maintains that such decisions reward Hamas and undermine Israel’s security. Israel’s embassy in Ottawa echoed this line, warning that recognition would “legitimise Hamas barbarity.”
Over 60,000 Palestinians have been killed in Gaza since 2023, according to humanitarian organisations. UN experts and international human rights groups have accused Israel of war crimes, including using starvation as a weapon. At least 154 Palestinians -- 89 of them children -- have died from hunger in Gaza so far, according to verified reports.
Despite these figures, Trump has remained firm in his support for Israel. However, he has acknowledged that “starvation is clearly taking place in Gaza,” and has dispatched envoy Steve Witkoff to Israel for ceasefire and aid discussions.
France confirmed its plan to support Palestinian recognition at the same UN session. UK Prime Minister Keir Starmer also announced conditional recognition of Palestine in September, pending Israel’s actions in Gaza. This coordinated diplomatic shift from key US allies reflects growing international discontent with the humanitarian toll in Gaza.
Carney emphasised that Canada’s position is not a retreat from its support for Israel. Rather, it aims to safeguard Israel’s long-term future through a viable two-state outcome. He condemned Hamas and highlighted Israel’s own internal challenges, including recent votes in its parliament favoring West Bank annexation.
He concluded that peace is no longer possible through the status quo. “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.
With the UK, France and now Canada pivoting toward Palestinian statehood, pressure mounts on Washington to reassess its position -- even as trade tensions with Ottawa threaten to boil over.