President Donald Trump warned Thursday that Canada's move to recognize a Palestinian state will complicate efforts to finalize a U.S.-Canada trade agreement, threatening a 35% tariff on Canadian goods if a deal is not reached by Friday. The statement escalates Trump's use of trade policy as leverage over international diplomatic positions.
"Wow! Canada has just announced that it is backing statehood for Palestine," Trump posted on his Truth Social platform. "That will make it very hard for us to make a Trade Deal with them. Oh' Canada!!!"
The remarks followed Canadian Prime Minister Mark Carney's announcement on Wednesday that Canada would join France, the United Kingdom, and other allies in recognizing Palestinian statehood at the United Nations General Assembly in September, contingent on the Palestinian Authority meeting certain conditions. Carney said that recognition would require demilitarization and elections without Hamas.
"The deepening suffering of civilians leaves no room for delaying coordinated international action to support peace, security and the dignity of human life," Carney stated. He added that Mahmoud Abbas, head of the Palestinian Authority, had assured Canada the conditions could be met, though "much has to happen before a democratic viable state is established."
Trump, who had been noncommittal about the United Kingdom and France's similar positions, took a firmer stance with Canada. White House Press Secretary Karoline Leavitt said,Trump "expressed his displeasure and his disagreement with the leaders of France, the United Kingdom and Canada. He feels as though that's rewarding Hamas..."
Trump has echoed Israel's stance that recognition of Palestinian statehood amounts to a reward for terrorism. "You're rewarding Hamas if you do that. I don't think they should be rewarded," Trump told reporters aboard Air Force One earlier in the week.
While some Canadian exports are still protected under the 2020 United States-Mexico-Canada Agreement (USMCA), that agreement is up for renegotiation next year. Trump's new tariff threat, however, would affect all Canadian goods not covered by the existing pact.
Carney's office declined to comment on the U.S. president's statement.
The Trump administration has increasingly tied trade policy to broader foreign policy issues. Earlier this week, Trump announced tariffs on Brazil would increase to 50%, linking the move to the prosecution of former Brazilian President Jair Bolsonaro, a political ally. He also threatened India with 15% additional tariffs over its purchase of Russian oil, citing tensions with Vladimir Putin.
On Thursday, Trump finalized trade deals with Cambodia and Thailand after demanding the two nations resolve a border conflict. These maneuvers come just days before a self-imposed deadline for new trade deals with dozens of countries or the imposition of sweeping tariffs.
Canada is one of the largest buyers of U.S. exports, and Carney had previously acknowledged that any new trade deal was unlikely to eliminate tariffs entirely.
