Trump Ties Canada Trade Deal to Palestine Recognition/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump warned that Canada’s decision to recognize a Palestinian state may derail a pending trade deal. While previously indifferent to similar moves by Britain and France, Trump is now using the issue as leverage in tariff negotiations. The move marks another example of the president tying foreign policy to trade threats.
Trump Uses Canada’s Palestine Recognition as Trade Leverage: Quick Looks
- Trump threatens to stall Canada trade deal over Palestinian statehood recognition
- Canada plans to recognize Palestine at UN in September
- Trump previously downplayed similar moves by UK and France
- Tariff threat of 35% looms over Canadian exports
- U.S.–Canada trade tensions rise ahead of Friday tariff deadline
- Trump says recognizing Palestine “rewards Hamas”
- Canada defends move as part of preserving two-state solution
- U.S.-Mexico-Canada Agreement still provides partial trade protections
Deep Look: Trump Threatens Canadian Trade Deal Over Palestine Recognition Ahead of Tariff Deadline
President Donald Trump escalated tensions with Canada on Thursday, warning that a pending trade deal could collapse after Canadian Prime Minister Mark Carney announced plans to recognize a Palestinian state in September. Trump’s comments, delivered in an early morning post on Truth Social, marked a sharp pivot from his earlier dismissive tone toward similar announcements by France and the United Kingdom.
The president’s reaction underscores a growing pattern in his administration’s approach to foreign affairs — leveraging trade negotiations to influence countries’ decisions on unrelated political and diplomatic issues.
“Wow! Canada has just announced that it is backing statehood for Palestine,” Trump posted. “That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”
Carney’s announcement came during a Wednesday news conference in Ottawa, in which he confirmed Canada would formally recognize a Palestinian state at the upcoming 80th Session of the United Nations General Assembly. The move was framed as a response to the humanitarian crisis in Gaza and part of a broader international trend pressuring Israel over its military campaign in the region.
Carney stated that recognition would be conditional on the Palestinian Authority holding elections that exclude Hamas and on the demilitarization of the future Palestinian state.
Trump’s Selective Outrage
Trump’s indignation over Canada’s position contrasted with his recent responses to similar diplomatic moves. Just days ago, he said he had no issue with British Prime Minister Keir Starmer’s declaration that the UK would also recognize a Palestinian state if Israel does not commit to a ceasefire and peace framework. Last week, he dismissed French President Emmanuel Macron’s recognition pledge as inconsequential, saying it “was not going to change anything.”
Observers note that Trump has repeatedly used trade policy as a tool for settling political scores. Earlier this week, he imposed steep tariffs on Brazil after that country indicted former President Jair Bolsonaro — a close Trump ally — over attempts to overturn his election loss.
Now, Canada’s symbolic recognition of Palestine appears to be the latest grievance cited in a growing list of justifications for Trump’s trade war, which also includes battling fentanyl trafficking, stopping illegal immigration, countering human rights abuses, and balancing the U.S. budget.
Tariff Threats and Trade Deadlines
Trump’s warning to Canada comes ahead of a self-imposed Friday deadline, by which dozens of countries must finalize trade agreements or face sweeping new tariffs. Canada, despite being part of the United States-Mexico-Canada Agreement (USMCA) ratified in 2020, still faces the possibility of a 35% tariff on exports if a new deal isn’t reached.
The USMCA is up for renegotiation next year, but the current climate has cast doubt on whether productive talks can continue.
Carney’s government has not responded directly to Trump’s latest comments, but in Wednesday’s press conference, the prime minister emphasized that Canada’s move was grounded in international law and a desire to prevent the death of the two-state solution.
“We are working with our allies to preserve the possibility of a two-state solution,” Carney said. “The level of human suffering in Gaza is intolerable.”
Israel’s Position and Trump’s Policy
Trump’s stance on Palestinian statehood has hardened since the war in Gaza began in October 2023, after Hamas launched a surprise attack that killed 1,200 people in Israel and led to a full-scale Israeli military response.
While initially claiming neutrality on the issue of recognition, Trump clarified earlier this week that any recognition of Palestine would be akin to “rewarding Hamas,” which the U.S. and EU designate as a terrorist group.
A White House official speaking on condition of anonymity reinforced that position Thursday, saying:
“As the President stated, he would be rewarding Hamas if he recognizes a Palestinian state, and he doesn’t think they should be rewarded.”
Israel’s government, led by Prime Minister Benjamin Netanyahu, has firmly opposed any moves toward recognizing Palestinian statehood under current conditions. Ambassador Iddo Moed of Israel called Canada a “dear friend, but estranged,” and said the world was ignoring the continued captivity of Israeli hostages held by Hamas.
Rising Global Friction
More than 140 nations currently recognize Palestinian statehood, but Canada’s shift represents one of the most notable among G7 members after Macron’s France. Canada has historically supported a two-state solution but has refrained from unilateral recognition — until now.
With diplomatic and trade tensions mounting on multiple fronts, Canada’s recognition of Palestine may complicate an already fragile North American trade landscape. And for Trump, it adds another country to a growing list of allies being pressured into political compliance under the weight of looming tariffs.
Whether a trade deal between the U.S. and Canada will materialize by Friday remains uncertain. But one thing is clear: Trump’s trade strategy is now tightly interwoven with his broader foreign policy objectives, even when those objectives extend well beyond economics.
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