U.S. President Donald Trump said on Thursday that Canada’s decision to recognise a Palestinian state would make it “very hard” for Washington and Ottawa to finalise a new trade accord. Posting on Truth Social, Trump warned that the move could scuttle negotiations aimed at averting a 35 % tariff on all Canadian goods not covered by the United States-Mexico-Canada Agreement, which is set to take effect if no deal is reached before his 1 August deadline. Canada announced on Wednesday that it intends to grant formal recognition to a Palestinian state during the United Nations General Assembly in September, joining similar initiatives by France and the United Kingdom. Prime Minister Mark Carney said the step reflected Ottawa’s longstanding support for a two-state solution and cited the worsening humanitarian situation in Gaza. The White House later said Trump opposes the recognition drive by Canada, France and the U.K., arguing it would reward Hamas. The clash adds fresh uncertainty to already tense talks between the two neighbours. Canada is the United States’ second-largest trading partner, buying about US$349 billion of American goods last year while exporting roughly US$413 billion south of the border, including steel, aluminium and vehicles that are now facing tariff threats. Carney described the negotiations as "constructive" but acknowledged they may not conclude by the deadline, raising the prospect of a new escalation in the cross-border trade war.