U.S. retaliates as Canada signals recognition of Palestine, threatens harsh tariffs

Department of Research, Studies and International News31-07-2025

In a striking geopolitical development, tensions have sharply escalated between Canada and the United States after Ottawa expressed its intention to recognise the State of Palestine. The announcement, made by Canadian Prime Minister Mark Carney, comes amid growing international condemnation of Israel’s military aggression against Gaza, which has left tens of thousands dead and the besieged territory in ruins.

Canada’s move mirrors similar diplomatic steps taken by France and the United Kingdom, both of which have voiced support for Palestinian statehood in recent months. The coordinated stance from key Western powers signals a shift in global opinion, as the humanitarian disaster in Gaza worsens and calls for accountability grow louder.

Reacting to Canada’s declaration, U.S. President Donald Trump lashed out via his social media platform Truth Social, declaring that Canada’s position would make a trade agreement between the two countries “very hard.” He added, “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!!!”

The comments come as the U.S. and Canada are engaged in sensitive negotiations to finalize a new trade deal by August 1. Trump has threatened to impose a staggering 35% tariff on all Canadian goods not protected under the existing U.S.-Mexico-Canada Agreement (USMCA) if talks fail.

Carney, speaking earlier this week, confirmed that discussions with the U.S. have been “constructive” but acknowledged that an agreement might not be reached before the looming deadline. He emphasized that Canada’s decision to support Palestinian statehood is consistent with the country’s long-standing position in favour of a two-state solution, a vision that is rapidly disintegrating in the face of Israel’s relentless military campaign and illegal settlement expansion.

Highlighting the urgency of the humanitarian crisis in Gaza, Carney stated, “There is no room for delay in coordinated international action to support peace.” He added that Canada’s recognition would be contingent on reforms within the Palestinian Authority, including the exclusion of Hamas from future elections and the full demilitarization of any future Palestinian state.

However, Carney’s conditions appear to reflect a cautious diplomatic balancing act, attempting to maintain relations with Western allies while responding to the catastrophic conditions on the ground in Gaza. Over 60,000 Palestinians have been killed since 2023, with many more injured or displaced. International outrage continues to grow as starvation spreads and reports emerge of civilians being killed while trying to access aid, aid often facilitated under U.S. and Israeli military oversight.

Even Trump, known for his unapologetically pro-Israel stance, recently admitted that famine is “clearly happening” in Gaza, contradicting Israeli denials. His Middle East envoy, Steve Witkoff, is scheduled to arrive in Tel Aviv for ceasefire and humanitarian talks, though many observers doubt any significant shift in U.S. policy will occur.

Meanwhile, the Israeli embassy in Ottawa reacted furiously to Canada’s announcement, claiming that recognition of a Palestinian state without “functioning institutions or leadership” would “reward the barbarity of Hamas.” This rhetoric mirrors that of Washington, where the recognition of Palestine is still viewed as a concession to what they label as “terrorism”, a perspective that neglects the collective punishment and devastation inflicted upon millions of Palestinian civilians.

Despite these criticisms, Palestinian Authority President Mahmoud Abbas welcomed Canada’s decision as “historic,” while France pledged to cooperate closely with Ottawa to restore peace prospects in the region. The UK has also indicated it may follow suit, with Prime Minister Keir Starmer stating that unless Israel agrees to a ceasefire, Britain will formally recognize Palestine at the upcoming UN General Assembly session in September.

Carney underlined that Canada’s support for a Palestinian state is no longer viable only through Israeli consent, given the country’s increasingly hardline political stance and expanding illegal settlements across the occupied West Bank and East Jerusalem. He noted that the Israeli parliament is even considering formal annexation of the West Bank, a move that would spell the death of the two-state framework altogether.

He concluded by framing the decision not as a rebuke of Israel, but rather as a necessary step to safeguard the future of both peoples. “Any path to lasting peace for Israel also requires a viable and stable Palestinian state,” Carney said, affirming Canada’s continued belief in peaceful coexistence, though no longer on Israel’s terms alone.

This rupture in U.S.-Canada relations marks a turning point in Western policy discourse on Palestine, one that reveals the growing divide between Washington’s unconditional support for Tel Aviv and the broader international community’s increasing insistence on justice, statehood, and accountability.