U.S. President Donald Trump warned that Canada’s decision to recognize Palestinian statehood could derail future trade negotiations with Washington, escalating tensions just hours before his self-imposed August 1 deadline for new bilateral deals.

The warning came via Trump’s Truth Social account, where he wrote, “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.”

The comment followed Canadian Prime Minister Mark Carney’s formal declaration on Wednesday that Ottawa would endorse the recognition of Palestine, aligning itself with recent positions taken by the United Kingdom and France. Carney said the move was in response to the worsening humanitarian crisis in Gaza and Canada’s long-standing support for a two-state solution.

“Canada has long been committed to an independent, viable, and sovereign Palestinian state living side by side with the state of Israel in peace and security,” Carney stated, adding that formal recognition would take place in September, contingent upon the Palestinian Authority committing to general elections in 2026 and the exclusion of Hamas from governance. He described the suffering in Gaza as “intolerable,” referencing famine conditions and widespread malnutrition.

The U.S. response has been swift and punitive in tone. Trump, who has previously threatened Canada with increased tariffs during his second term, reiterated earlier plans to raise duties on Canadian imports not covered under the U.S.-Mexico-Canada Agreement (USMCA) from 25% to 35%. The threatened measures come amid broader U.S. efforts to reshape trade alliances around ideological alignment and national interest. 

Israeli officials have condemned Ottawa’s decision. Israel’s Foreign Ministry said the recognition amounted to a “reward for Hamas,” while Foreign Minister Gideon Sa’ar warned that a Palestinian state would become a “Hamas state,” undermining prospects for a ceasefire.