Trump threatens trade deal over Canada's plan to recognise Palestine

US President Donald Trump has said Canada’s decision to recognise Palestine will make it “very hard” for a trade deal to be reached between Washington and Ottawa.

Shortly after Canadian Prime Minister Mark Carney announced the move on Wednesday, Trump took to his Truth Social platform in the early hours of Thursday morning to threaten his country’s neighbour.

“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,” he wrote.

The social media post comes a day before the 1 August deadline Trump has given countries to negotiate trade deals with the US.

Earlier in July, Trump said he would increase the tariffs on imports from Canada that are not covered by the US-Mexico-Canada trade agreement by 10% to a total of 35%.

It is the latest in a long line of tariff threats Trump has made against Canada since the start of his second presidential term in January.

Carney’s announcement about Palestine on Wednesday follows similar moves by France and the UK, who share growing concerns about the humanitarian crisis in Gaza.

After almost two years of Israeli military action in the enclave, experts now say that Gaza is experiencing famine, with dozens of people reported to have died from malnutrition amid the scarcity of food.

Speaking about the situation in Gaza, the Canadian premier described the level of suffering there as “intolerable”.

“Canada has long been committed to a two-state solution. An independent, viable and sovereign Palestinian state living side by side with the state of Israel in peace and security,” he said.

Carney explained that his government would recognise Palestine at a meeting of world leaders in September, as long as the Palestinian Authority agrees to “holding general elections in 2026 in which Hamas can play no part, and to demilitarise the Palestinian state”.

Israel has strongly condemned the move in Ottawa.

Israel's Foreign Ministry said on X that the announcement was a "reward for Hamas" and that recognition of Palestine "harms the efforts to achieve a ceasefire in Gaza", a message echoed by Foreign Minister Gideon Sa'ar, who said a Palestinian state would be a "Hamas state".

Last week French President Emmanuel Macron confirmed that his country would recognise the state of Palestine at the UN in September.

UK Prime Minister Keir Starmer then said on Tuesday that Britain would do the same if Israel had not agreed to a ceasefire in Gaza and to a long-term peace process by then.