Donald Trump warns that Canada acknowledging Palestine as a state could complicate trade agreements

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United States President Donald Trump has criticised Canada’s intention to recognise a Palestinian state, saying it would make a trade deal between the US and Canada difficult.

“Wow! Canada has just announced that it is backing statehood for Palestine,” Trump wrote in a post on his Truth Social platform later on Thursday.

“That will make it very hard for us to make a trade deal with them. Oh Canada!!!”

Carney said on Wednesday tariff negotiations with Trump’s administration have been constructive, but the talks may not conclude by the deadline.

Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports.

It bought more than US$349 billion ($540 billion) of US goods last year and exported US$412 billion ($673 billion) to the US, according to US Census Bureau data.

Canada is also the top supplier of steel and aluminium to the United States, and faces tariffs on both metals as well as on vehicle exports.

Canada’s announcement follows France, UK

Canada is the third country to flag it will recognise a Palestinian state in the past week.

Four men in suits standing in an outside area in front of a row of trees.

France, Canada, and the UK have all signalled they will recognise Palestinian statehood, while US President Donald Trump has argued it would “reward Hamas”. Source: AAP / Ludovic Marin / Pool / EPA

United Kingdom Prime Minister Keir Starmer, meanwhile, said the UK would recognise statehood at the UN General Assembly unless Israel took “substantive steps to end the appalling situation in Gaza”.

The announcements by some of Israel’s closest allies reflect growing international outrage over Israel’s restrictions on food and other aid to Gaza, and the dire humanitarian crisis there.

Israel has bombarded Gaza since an October 2023 attack on southern Israel led by Hamas militants, in which some 1,200 people were killed and another 251 taken as hostages to Gaza, according to Israeli tallies.

Since then, Israel’s offensive in the Gaza Strip has killed more than 60,000 people and laid waste to much of the territory, according to Gaza health ministry.

In his announcement, Carney said Canada condemned “the fact that the Israeli government has allowed a catastrophe to unfold in Gaza”.

A chart showing which countries do and don't recognise Palestinian statehood.

Ten G20 countries already recognise Palestine as a state. Source: SBS News

He said his decision was informed by Canada’s “long-standing” belief in a two-state solution, and that the reality on the ground, including starvation of people in Gaza, meant that goal was “being eroded before our eyes”.

Carney said the planned recognition was based in part on repeated assurances from the Palestinian Authority, which represents the Palestinian state at the UN, that it was reforming its governance and is willing to hold general elections in 2026 in which Hamas “can play no part”.

The Palestinian state has been a non-member observer state of the UN General Assembly since 2012, recognised by more than three-quarters of the assembly’s 193 member states.

Israel’s foreign ministry rejected Carney’s statement, saying in a statement the decision would harm efforts to achieve a ceasefire in Gaza.