US President Donald Trump threatens to halt a trade deal with Canada if the country recognizes Palestine. The statement comes after Canada’s Prime Minister confirmed plans for recognition at the UN General Assembly this coming September.
Canadian Prime Minister Mark Carney announced on Wednesday that the country plans to recognize Palestine as an independent state when the UN General Assembly convenes in September.
Carney highlighted humanitarian arguments and argued that prospects for a two-state solution have disappeared, which other countries – including France and the United Kingdom – have also expressed during the summer.
However, the recognition is conditional and dependent on reforms within the Palestinian Authority as well as promised general elections in 2026 – elections in which Hamas would not be allowed to participate.
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.
My statement on Canada’s recognition of a Palestinian state: pic.twitter.com/VHW1ziQ9s0
— Mark Carney (@MarkJCarney) July 30, 2025
Donald Trump reacted immediately and wrote on his Truth Social platform that Canada’s intended recognition would have serious consequences for relations between the countries.
– That will make it very hard for us to make a trade deal with them, Trump declared shortly after Canada’s announcement.
Donald J. Trump Truth Social 07.31.25 12:29 AM EST pic.twitter.com/21uxGGBjqG
— Fan Donald J. Trump Posts From Truth Social (@TrumpDailyPosts) July 31, 2025
Shaky relations between US and Canada
Trump has previously threatened to impose 35 percent tariffs on Canadian goods from August 1, something that has already caused concern in trade relations between the neighboring countries.
According to American sources, Trump’s move aims to increase pressure on Canada to refrain from recognizing Palestine. The goal is also to defend US trade policy and geopolitical interests at a time of increased tensions surrounding Israel and the war in Gaza.

The trade relationship between the US and Canada is among the world’s largest and has historically been very close, but over the past year several major conflicts regarding tariffs, energy and climate regulations have strained cooperation.
Analysts believe that an American trade halt or high tariffs could have significant economic consequences for Canada’s export industry.
It remains unclear how far the Trump administration is prepared to go, or whether Canada will stick to its planned recognition ahead of the UN meeting in September.
The situation is expected to be closely watched by both other allied countries and international organizations in the coming weeks.