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in USA

US-Canada Trade Deal Threatened By Canada’s Move To Recognize Palestinian State

Comfort Ampomaaby Comfort Ampomaa
July 31, 2025
Reading Time: 5 mins read
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US President, Donald Trump.

US President, Donald Trump has thrown doubt over ongoing tariff negotiations with Canada, writing on his Truth Social platform that Ottawa’s plan to recognise a Palestinian state will affect the negotiations.

This came as Canada announced the move, following similar announcements from the UK and France. Trump responded by writing, “Wow!… That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”

The Trump administration has said that it will impose a 35 percent tariff on many Canadian goods from Friday if a trade deal is not reached.

Trump Mark
President Donald Trump meets with Canadian Prime Minister Mark Carney in the Oval Office at the White House on May 6 in Washington, DC.

The US President has set a deadline of 1 August for countries to make a trade deal with the US, or face higher tariffs.

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The move by Canada, the UK, and France to recognise a Palestinian state comes as the hunger crisis in Gaza deepens.

Announcing Canada’s decision, Canadian Prime Minister, Mark Carney explained that Ottawa had hoped that a two-state solution could be achieved through a negotiated peace process, but that approach was “no longer tenable.”

Canadian Prime Minister, Mark Carney.
Canadian Prime Minister, Mark Carney.

He told reporters that Canada intends to recognise the State of Palestine at the 80th session of the United Nations General Assembly in September 2025.

Carney said that the recognition is predicated on promises of reform from the Palestinian Authority and President Mahmoud Abbas, as well as a commitment to hold general elections in 2026.

The Canadian Prime Minister stressed that Hamas can play no role in the future of Palestine and would not be allowed to take part in future elections, a condition that some argue may taint any democratic process. “Preserving a two-state solution means standing with all people who choose peace over violence or terrorism,” Carney said.

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United States, Israel’s top ally, has rejected moves to recognise a Palestinian state, saying that the policy rewards Hamas.

Earlier this month, Trump dismissed his French counterpart, Emmanuel Macron, when the latter announced plans to acknowledge Palestine.

He also objected to the UK’s move, saying that the issue did not come up during his meeting with British Prime Minister Keir Starmer in Scotland.

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“You could make the case that you’re rewarding people, that you’re rewarding Hamas if you do that. I don’t think they should be rewarded. I’m not in that camp, to be honest.”

Donald Trump

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 National Council of Canadian Muslims welcomed Carney’s announcement but called on Canada to take other practical steps to stop Israel’s assault on Gaza.

It compared Israel’s actions in Gaza to Trump’s own pressure campaign to make Canada the 51st state in the US.

The group said in a statement that Canada must continue to stand by “our values to drive an independent foreign policy, particularly as the same Trump administration that backs the annexation of Gaza also threatens Canada with ideas of a 51st state.”

“This means Canada must apply further sanctions on the Netanyahu government, impose a full two-way arms embargo on the [Israeli military], review the Canada-Israel Free Trade Agreement, and provide better assistance to those escaping Gaza to reunite with loved ones here in Canada.”

National Council of Canadian Muslims

Last year, Canada announced that it would stop issuing new permits for weapons exports to Israel amid concerns over human rights violations.

However, earlier this week, a coalition of advocacy groups released a report based on Israeli tax records, revealing new details indicating that weapons have continued to be sent to Israel.

The groups accused the Canadian government of constructing a “web of lies” to shield itself from criticism and called on Ottawa to cancel all existing arms export permits to Israel.

Israel Slams Canada’s Move To Recognize Palestinian State

Israel slammed an announcement by Canada that the country will recognise a Palestinian state, which follows the announcements by both France and the United Kingdom. All three are expected to recognise the State of Palestine come September at the UN General Assembly.

Israel said that this is counterproductive and concedes to Hamas, and is a reward for them. It also says it is counterproductive to achieving any sort of ceasefire deal or framework to bring about the release of the remaining captives in Gaza.

Israeli Prime Minister, Benjamin Netanyahu has said that he has worked his entire political career to block the establishment of a Palestinian state, and that he and his right-wing coalition would continue to block that move any time they are in office.

READ ALSO: NPP Charged to Prioritise Unity over Expedience in 2028 Flagbearer Race

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