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Trump Threatens Trade Deal Over Canada’s Palestine Move; Secures Pact with South Korea
Trump slams Canada’s plan to recognize Palestine, saying it threatens US-Canada trade talks. Meanwhile, US finalizes a $350B investment and tariff deal with South Korea amid Gaza war backlash.
ND
by News Desk
2025-07-31
Trump Threatens Trade Deal Over Canada’s Palestine Move; Secures Pact with South Korea

Former U.S. President Donald Trump issued a stern warning to Canada on Thursday, saying that its recent move to back Palestinian statehood would make it "very hard" to finalize an ongoing trade agreement between the two nations. His remarks come at a pivotal moment as global pressure mounts over Israel’s military campaign in Gaza.

“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 posted on his platform, Truth Social.

The comments came in response to Canadian Prime Minister Mark Carney’s statement that Canada plans to recognize Palestine at the upcoming 80th United Nations General Assembly, aligning with recent announcements by France and the United Kingdom.

Carney emphasized that the move was aimed at reviving hopes for a two-state solution, citing the humanitarian catastrophe in Gaza and the failure of the Israeli government to protect civilian lives. However, he added strict preconditions, including the Palestinian Authority’s commitment to reforms, elections excluding Hamas in 2026, and demilitarization of a future Palestinian state.

The decision triggered sharp criticism from Israel. Its embassy in Ottawa warned that recognizing Palestinian statehood in the current context would reward “Hamas barbarity,” referencing the group’s October 2023 attack.

In contrast, Palestinian Authority President Mahmoud Abbas welcomed the move as “historic,” while French and British leaders expressed support for coordinated international action.

Meanwhile, Trump showcased diplomatic progress with another U.S. ally—South Korea. The United States and South Korea reached a comprehensive $350 billion investment deal and agreed to reduce auto tariffs from 25% to 15%. In return, South Korea committed to large-scale energy purchases and tech partnerships, including shipbuilding, nuclear energy, and semiconductors.

South Korean President Lee Jae Myung hailed the deal, calling it a “win-win” amid intense negotiations, following political turbulence in Seoul. Trump praised the agreement as a “Full and Complete Trade Deal” that would bring long-term benefits to both nations.

Amid the trade drama, South Korean tech giants also sealed major commercial agreements: Samsung signed a $16.5 billion chip deal with Tesla, and LG Energy Solution announced a $4.3 billion battery partnership with the automaker.

Despite the global economic implications, Trump's messaging focused heavily on punishing Canada’s political alignment with pro-Palestine sentiment—highlighting how foreign policy and trade are increasingly intertwined.

As the August 1 deadline for new tariffs looms, analysts predict that the tension between diplomacy and economic pragmatism will continue to shape Washington’s global negotiations.

 
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