Trump Warns Canada: Backing Palestinian State Could Damage U.S. Trade Deal

President Donald Trump issued a sharp warning to Canada late Wednesday, making it clear that any move by Ottawa to recognize a Palestinian state could jeopardize ongoing trade talks with the United States — and trigger punitive tariffs within days.

The statement came just hours after Canadian Prime Minister Mark Carney announced that his government would join France and the United Kingdom in backing statehood for “Palestine” at the United Nations General Assembly in September. Trump, who has long opposed unilateral recognition of a Palestinian state, didn’t hold back.

“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. Oh’ Canada!!!” Trump wrote in a late-night post on Truth Social.

The president’s remarks come amid a tense final stretch in trade negotiations between Washington and Ottawa. If no agreement is reached by Friday, Canada faces a 35% tariff under Trump’s “America First” trade enforcement timeline. The tariff threat, previously tied to disputes over dairy access and digital services taxation, now appears linked to Canada’s diplomatic position on the Israeli-Palestinian conflict.

Carney’s statement emphasized that Hamas must play “no role” in the governance of a Palestinian state, while also reaffirming Canada’s commitment to Israel’s security. But for Trump, that wasn’t nearly enough.

On Tuesday, the president had already dismissed the entire concept of a two-state solution as rewarding terrorism. “You’re rewarding Hamas if you do that,” Trump said bluntly. “And I’m not about to do that.”

The Trump administration also boycotted a UN conference earlier this week that promoted Palestinian statehood, with senior officials calling the event “a publicity stunt” and “an insult to Israel and the American people.”

This isn’t the first time President Trump has used tariffs as a blunt instrument to enforce foreign policy objectives. Earlier this week, India was slapped with a 25% tariff and warned of additional penalties over its ongoing purchases of oil and weapons from Russia. The administration has also hinted that China could face similar consequences for skirting Russian sanctions.

Now, Canada is the latest ally to face Trump’s economic wrath for deviating from Washington’s geopolitical agenda. His core message to Ottawa is unmistakable: If you stand with Hamas by supporting Palestinian statehood, don’t expect a handshake in the trade room.

The 35% tariff threat looming over Canada would likely hit a wide array of industries, including automotive, lumber, and agricultural exports. Trump’s previous trade battles with Canada, including during his first term’s USMCA negotiations, resulted in significant concessions from Canadian officials under pressure.

This time, however, the stakes are not just economic — they’re ideological. Trump has repeatedly positioned himself as the most pro-Israel president in U.S. history, and his administration’s foreign policy remains unapologetically aligned with the Israeli government’s rejection of any state for the Palestinians that includes Hamas or rewards terror.

With France and the U.K. already backing statehood, and now Canada joining their ranks, Trump is drawing a hard line in the sand: align with Hamas’s goals — even indirectly — and face economic consequences.

Unless Carney walks back his declaration or agrees to delay any formal recognition, the 35% tariff is all but guaranteed to hit Canada on Friday.

For Trump, the equation is simple: you can have trade with America — or you can endorse the political dreams of a terrorist-run enclave. But you can’t have both.