Trump Warns Canada’s Palestinian State Recognition May Complicate Trade Deal

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US President Donald Trump has expressed disapproval of Canada’s plan to acknowledge a Palestinian state, stating that it could complicate trade agreements between the US and Canada.

“Incredible! Canada just declared its support for Palestinian statehood,” Trump posted on his Truth Social platform on Thursday.

“This will make establishing a trade agreement with them very challenging. Oh Canada!!!”

Carney mentioned on Wednesday that tariff discussions with Trump’s administration have been positive, yet they might not wrap up by the deadline.

Canada ranks as the second-largest trading partner of the US after Mexico and is the number one purchaser of US exports.

Last year, Canada bought over US$349 billion ($540 billion) in US goods and sold US$412 billion ($673 billion) of its products to the US, based on data from the US Census Bureau.

Additionally, Canada is the leading supplier of steel and aluminum to the US and is confronting tariffs on these metals as well as on vehicle exports.

Canada’s announcement follows France, UK

Canada is the third country to flag it will recognise a Palestinian state in the past week.

Four men in suits standing in an outside area in front of a row of trees.

France, Canada, and the UK have all indicated their intent to acknowledge Palestinian statehood, while US President Donald Trump has contended it would “grant favor to Hamas”. Source: AAP / Ludovic Marin / Pool / EPA

United Kingdom Prime Minister Keir Starmer, meanwhile, said the UK would recognise statehood at the UN General Assembly unless Israel took “substantive steps to end the appalling situation in Gaza”.

The announcements by some of Israel’s closest allies reflect growing international outrage over Israel’s restrictions on food and other aid to Gaza, and the dire humanitarian crisis there.

Israel has bombarded Gaza since an October 2023 attack on southern Israel led by Hamas militants, in which some 1,200 people were killed and another 251 taken as hostages to Gaza, according to Israeli tallies.

Since then, Israel’s offensive in the Gaza Strip has killed more than 60,000 people and laid waste to much of the territory, according to Gaza health ministry.

In his announcement, Carney said Canada condemned “the fact that the Israeli government has allowed a catastrophe to unfold in Gaza”.

A chart showing which countries do and don't recognise Palestinian statehood.

Ten G20 countries already recognise Palestine as a state. Source: SBS News

He said his decision was informed by Canada’s “long-standing” belief in a two-state solution, and that the reality on the ground, including starvation of people in Gaza, meant that goal was “being eroded before our eyes”.

Carney explained that the intended recognition is partly based on continuous assurances from the Palestinian Authority, representing the Palestinian state at the UN, that it was overhauling its governance and is prepared to hold general elections in 2026 where Hamas “will not have any involvement.”

The Palestinian state has been a non-member observer state of the UN General Assembly since 2012, recognised by more than three-quarters of the assembly’s 193 member states.

Israel’s foreign ministry rejected Carney’s statement, saying in a statement the decision would harm efforts to achieve a ceasefire in Gaza.