Carney’s Palestine state move risks tariff talks with US: Trump

Donald Trump has warned Canada it will be ‘very hard’ to do a trade deal as Mark Carney said he couldn’t see a scenario where Ottawa would change its mind over an independent Palestine.

Donald Trump has warned Canada it will be “very hard” to do a trade deal after Prime Minister Mark Carney said Ottawa would join France and Britain in plans to recognise an independent Palestine at the UN General Assembly in September.

Announcing the decision on Thursday (AEST), Mr Carney said his dramatic policy shift was necessary to preserve hopes of a two-state solution.

“Canada intends to recognise the state of Palestine at the 80th session of the United Nations General Assembly in September 2025,” he said.

However, Mr Carney said Ottawa’s recognition would be contingent on successful reforms by the Palestinian Authority, which currently governs in the occupied West Bank, including elections in 2026, demilitarisation and the exclusion of Hamas.

But Mr Trump, who has been careful not to attack Britain and France’s similar moves except to warn against rewarding Hamas, lashed Canada’s decision.

In a post on his Truth Social platform, Mr Trump 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. Oh Canada!!!”

Earlier, the White House had released a relatively mild statement on the issue, saying: “As the president stated, he would be rewarding Hamas if he recognises a Palestinian state, and he doesn’t think they should be rewarded. So he is not going to do that. President Trump’s focus is on getting people fed.”

Announcing his decision, Mr Carney said the worsening suffering of civilians in Gaza left “no room for delay in co-ordinated international action to support peace.”

Israel blasted Canada’s announcement as part of a “distorted campaign of international pressure,” but Palestinian Authority President Mahmoud Abbas welcomed Canada’s “historic” move.

In a phone call with Mr Carney, Mr Abbas said he “appreciated Canada’s historic position in recognising the State of Palestine, which will enhance peace, stability, and security in the region.”

Asked by reporters if there was a scenario where Canada could change its position before the UN meeting, Mr Carney said: “there’s a scenario (but) possibly one that I can’t imagine.”

Mr Carney’s move follows that of British Prime Minister Keir Starmer on Wednesday (AEST), who said the UK would recognise Palestine in September unless Israel agreed to a ceasefire.

Mr Carney has also positioned Canada alongside France, after President Emmanuel Macron said his country would formally recognise a Palestinian state during the UN meeting, the most powerful European nation to announce such a move.

The announcements from Sir Keir and Mr Macron drew condemnation from Israel, which said the move “rewards terror”, while US President Donald Trump dismissed the decision as pointless.

Mr Carney said his decision was informed by Canada’s “longstanding” belief in a two-state solution to the decades-long Israeli-Palestinian conflict.

“That possibility of a two-state solution is being eroded before our eyes,” he said in Ottawa.

Mr Carney referenced Israel’s “ongoing failure” to prevent humanitarian catastrophe in Gaza amid its war against Hamas, as well the expansion of settlements in the occupied West Bank and Israeli-annexed east Jerusalem.

“For decades, it was hoped that (a two-state solution) would be achieved as part of a peace process built around a negotiated settlement between the Israeli government and the Palestinian Authority,” he said.