OTTAWA (Reuters) -The Canadian team working on a trade deal with the United States could walk away from talks in the wake of a U.S. decision to impose a 35% tariff on some goods from Canada, an adviser to Prime Minister Mark Carney said on Friday.

President Donald Trump says Canada’s announcement it'll recognize a Palestinian state “will make it very hard” for the U.S. to reach a trade agreement with it.

O TTAWA—Canadian Prime Minister Mark Carney said bilateral talks with Washington to resolve the tariff row might not lead to a deal before the Aug. 1 deadline. Senior officials are in Washington to find an agreement that is suitable for Canada, Carney said.