Prime Minister Mark Carney’s decision to recognize Palestinian statehood may have jeopardized good trade terms with the United States, as U.S. President Donald Trump warned that the move would make it “very hard” to reach a deal.
“Wow! Canada has just announced that it is backing statehood for Palestine,” Trump wrote in a post on Truth Social. “That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”
The comment came hours after Carney confirmed that he would direct Canada’s representatives to recognize a Palestinian state at the United Nations General Assembly in September.
Speaking to the press gallery Thursday in Ottawa after a cabinet meeting, Carney cited a humanitarian crisis in Gaza and the collapse of a credible peace process as the reasons behind his decision.
“The level of human suffering in Gaza is intolerable,” he said citing the death toll which has reached tens of thousands.
“Preserving a two-state solution means standing with all people who choose peace over violence or terrorism.”
Canada’s recognition, Carney added, came with a request for a series of reforms promised by Palestinian Authority President Mahmoud Abbas, including elections in 2026, a commitment to demilitarization, and the exclusion of Hamas from any governing role. However, Carney did not indicate what would happen should the Palestinian government not follow through on the requests.
The Trump administration, however, responded swiftly, with the president directly linking Canada’s foreign policy to bilateral trade consequences.
While Trump stopped short of imposing tariffs on Canada, his administration announced a 90-day extension of a tariff-heavy agreement with Mexico on Wednesday, with no mention of Ottawa.
The extension includes 25 per cent tariffs on automobiles, and 50 per cent tariffs on steel, aluminum and copper.
“I have just concluded a telephone conversation with the President of Mexico, Claudia Sheinbaum,” Trump said in a separate post.
“We will be talking to Mexico over the next 90 days with the goal of signing a trade deal. There will be continued cooperation on the border as it relates to all aspects of security, including drugs, drug distribution, and illegal immigration.”
The omission of Canada from the statement is widely seen as a diplomatic snub, as Canada had been bracing for a trade breakthrough before expanded U.S. tariffs set for Aug. 1.
Canada’s formal recognition of Palestine aligns it with a growing number of European countries, most recently France and the United Kingdom.