2 files changed, 109 insertions, 0 deletions
diff --git a/packages/cli/src/ui/hooks/useFolderTrust.test.ts b/packages/cli/src/ui/hooks/useFolderTrust.test.ts
new file mode 100644
index 00000000..61552af0
--- /dev/null
+++ b/packages/cli/src/ui/hooks/useFolderTrust.test.ts
@@ -0,0 +1,78 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { renderHook, act } from '@testing-library/react';
+import { vi } from 'vitest';
+import { useFolderTrust } from './useFolderTrust.js';
+import { LoadedSettings, SettingScope } from '../../config/settings.js';
+import { FolderTrustChoice } from '../components/FolderTrustDialog.js';
+
+describe('useFolderTrust', () => {
+  it('should set isFolderTrustDialogOpen to true when folderTrustFeature is true and folderTrust is undefined', () => {
+    const settings = {
+      merged: {
+        folderTrustFeature: true,
+        folderTrust: undefined,
+      },
+      setValue: vi.fn(),
+    } as unknown as LoadedSettings;
+
+    const { result } = renderHook(() => useFolderTrust(settings));
+
+    expect(result.current.isFolderTrustDialogOpen).toBe(true);
+  });
+
+  it('should set isFolderTrustDialogOpen to false when folderTrustFeature is false', () => {
+    const settings = {
+      merged: {
+        folderTrustFeature: false,
+        folderTrust: undefined,
+      },
+      setValue: vi.fn(),
+    } as unknown as LoadedSettings;
+
+    const { result } = renderHook(() => useFolderTrust(settings));
+
+    expect(result.current.isFolderTrustDialogOpen).toBe(false);
+  });
+
+  it('should set isFolderTrustDialogOpen to false when folderTrust is defined', () => {
+    const settings = {
+      merged: {
+        folderTrustFeature: true,
+        folderTrust: true,
+      },
+      setValue: vi.fn(),
+    } as unknown as LoadedSettings;
+
+    const { result } = renderHook(() => useFolderTrust(settings));
+
+    expect(result.current.isFolderTrustDialogOpen).toBe(false);
+  });
+
+  it('should call setValue and set isFolderTrustDialogOpen to false on handleFolderTrustSelect', () => {
+    const settings = {
+      merged: {
+        folderTrustFeature: true,
+        folderTrust: undefined,
+      },
+      setValue: vi.fn(),
+    } as unknown as LoadedSettings;
+
+    const { result } = renderHook(() => useFolderTrust(settings));
+
+    act(() => {
+      result.current.handleFolderTrustSelect(FolderTrustChoice.TRUST_FOLDER);
+    });
+
+    expect(settings.setValue).toHaveBeenCalledWith(
+      SettingScope.User,
+      'folderTrust',
+      true,
+    );
+    expect(result.current.isFolderTrustDialogOpen).toBe(false);
+  });
+});
diff --git a/packages/cli/src/ui/hooks/useFolderTrust.ts b/packages/cli/src/ui/hooks/useFolderTrust.ts
new file mode 100644
index 00000000..90a69132
--- /dev/null
+++ b/packages/cli/src/ui/hooks/useFolderTrust.ts
@@ -0,0 +1,31 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { useState, useCallback } from 'react';
+import { LoadedSettings, SettingScope } from '../../config/settings.js';
+import { FolderTrustChoice } from '../components/FolderTrustDialog.js';
+
+export const useFolderTrust = (settings: LoadedSettings) => {
+  const [isFolderTrustDialogOpen, setIsFolderTrustDialogOpen] = useState(
+    !!settings.merged.folderTrustFeature &&
+      // TODO: Update to avoid showing dialog for folders that are trusted.
+      settings.merged.folderTrust === undefined,
+  );
+
+  const handleFolderTrustSelect = useCallback(
+    (_choice: FolderTrustChoice) => {
+      // TODO: Store folderPath in the trusted folders config file based on the choice.
+      settings.setValue(SettingScope.User, 'folderTrust', true);
+      setIsFolderTrustDialogOpen(false);
+    },
+    [settings],
+  );
+
+  return {
+    isFolderTrustDialogOpen,
+    handleFolderTrustSelect,
+  };
+};