U.S. President Donald Trump has threatened to impose a 100 percent tariff on all Canadian goods entering the United States if Canada moves forward with a trade agreement with China, intensifying trade tensions between the two neighbours. Trump made the warning on his social media platform, framing a potential deal as a strategy that could turn Canada into a “drop-off port” for Chinese goods into the U.S. market — and saying China would “eat Canada alive” economically if that happened.
The threat comes after Canadian Prime Minister Mark Carney’s recent trip to Beijing, where Ottawa and China agreed to resolve several tariff issues. Canadian officials have said there is no pursuit of a full free trade deal with China, stressing that the recent agreements were limited tariff resolutions, not a broader pact.
Growing diplomatic friction
Relations have cooled sharply between Washington and Ottawa. Trump also rescinded Canada’s invitation to his “Board of Peace” initiative after Carney criticized global economic trends at the World Economic Forum in Davos, framing them as a rupture in the post-war global order.
In response to Trump’s tariff threat, Carney launched a domestic “Buy Canadian” campaign, encouraging support for local industries and economic self-reliance.
Trade and economic stakes
Canada sends the majority of its exports to the United States, especially in sectors like energy, automotive goods, metals, and machinery. A 100 percent tariff would dramatically raise costs and could severely disrupt trade flows.
At the same time, Canada continues to affirm its commitments under the United States-Mexico-Canada Agreement (USMCA), which governs North American trade and requires consultation if a member contemplates a free trade agreement with a non-market economy like China. Ottawa insists it is respecting those commitments.
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