Canada prompts Trump trade threat on recognizing Palestine

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(Bloomberg) — Prime Minister Mark Carney said Canada plans to recognize a Palestinian state at the United Nations summit in September, following France and clashing with the US and Israel.

Carney said Canada’s long-favoured approach of a two-state solution through a negotiated settlement between Israel and the Palestinian Authority was “no longer tenable.” He said that process had been “gravely eroded” by Hamas terrorism and its rejection of Israel’s right to exist, as well as recent Israeli actions such as accelerated settlement building and a Knesset vote calling for the annexation of the West Bank.

“The level of human suffering in Gaza is intolerable — and is rapidly deteriorating,” Carney said in Ottawa on Wednesday.

Carney said the declaration relied upon commitments made by the Palestinian Authority, and that its president, Mahmoud Abbas, had committed to reforms and to holding elections in 2026 in which Hamas can play no part. He also said the Palestinian state must be demilitarized.

US President Donald Trump the decision by Canada would “make it very hard for us to make a Trade Deal with them,” according to a late night post on his Truth Social platform.

Responding to media questions on Wednesday, Carney said it’s possible trade talks with the US don’t conclude by Aug. 1, the date Trump had set out for higher tariffs kicking in on a wide range of countries, including import taxes rising to 35% from 25% on certain Canadian goods.

Carney and Abbas spoke Wednesday, with the prime minister informing him that “Canada will increase its efforts to promote peace and stability in the region, and work closely with regional allies toward this goal,” according to a statement from his office.

Canada is the third Group of Seven country to pivot on the central question of Palestinian statehood in the last several weeks. Earlier in July, French President Emmanuel Macron said he would would recognize a Palestinian state at the UN in September. A few days later, Prime Minister Keir Starmer said the UK would follow suit, if Israel won’t stop its war in Gaza and commit to a two-state solution. Both Starmer and Macron also said Hamas must release all hostages and disarm.

Israel quickly said it rejected the move.

“Let us be clear: Israel will not bow to the distorted campaign of international pressure against it,” Iddo Moed, Israel’s ambassador to Canada, said in an emailed statement. “We will not sacrifice our very existence by permitting the imposition of a jihadist state on our ancestral homeland that seeks our annihilation.”

Canada’s Conservative Party also said the unilateral declaration “sends the wrong message to the world: that violence and terror are effective tools for achieving political objectives.” The opposition also said it’s “impossible” that, at this moment, Hamas wouldn’t play a central role in any validated Palestinian state.

The US, Israel’s top ally, has rejected the growing recognition movement. Trump dismissed France’s plan for recognition last week, saying it wouldn’t change anything. Secretary of State Marco Rubio went further, deriding the growing statehood push as “reckless” and one that “sets back peace.”

International concerns have mounted in the wake of Israel’s military response to Hamas’s Oct. 7, 2023 terrorist attack, with UN Secretary-General Antonio Guterres saying Gaza is now on the brink of famine and that Palestinians there are “enduring a humanitarian catastrophe of epic proportions.”

Ceasefire talks faltered last week. The United Nations has been holding a special conference this week on settling the conflict, which the US boycotted.

Israeli Foreign Minister Gideon Sa’ar called international pressure a “distorted campaign” and that demands to end the war now mean leaving Hamas in power in Gaza. Establishing such a state at this time means creating a “Jihadist terror state” a few kilometres away from Israel, and this “ain’t gonna happen,” he added.

Hamas is designated as a terror organization by the European Union, Canada, the US and others.

Trump, typically a staunch defender of Israel, said the US would work on a new effort to provide food aid to alleviate starvation in Gaza — at odds with Israeli Prime Minister Benjamin Netanyahu, who’s said there’s no starvation.

—With assistance from Brian Platt.