Trump Threatens Canada With 100% Tariffs Over China Trade Deal

President Donald Trump threatened to impose 100% tariffs on all Canadian imports after Prime Minister Mark Carney signed a strategic partnership with China on January 16, 2026. The agreement allows up to 49,000 Chinese electric vehicles into Canada at a reduced 6.1% tariff rate in exchange for China lowering duties on Canadian agricultural exports, including canola, lobster, and crab. Trump accused Canada of becoming a "drop-off port" for Chinese goods to evade U.S. tariffs, claiming China would "eat Canada alive."

Diplomatic tensions escalated during the World Economic Forum in Davos, where Carney urged middle powers to unite against economic coercion and American hegemony. Trump responded by revoking Carney's invitation to a proposed "Board of Peace" and asserting that "Canada lives because of the United States." While U.S. Treasury Secretary Scott Bessent claimed Carney later retracted these remarks during a phone call, Carney maintained he stood by his statements.

Canada has denied pursuing a comprehensive free-trade agreement with China, characterizing the deal as a narrow rectification of specific trade issues consistent with the USMCA. Carney has linked Trump's threats to "prepositioning" ahead of the mandatory July 1 review of the USMCA. In response to U.S. volatility, Carney launched a "Buy Canadian" policy and a broader diversification strategy to double non-U.S. exports within a decade, including deepening ties with India.

Internal Canadian divisions emerged over the China deal, with Ontario Premier Doug Ford initially opposing the EV imports due to security and industry concerns, though he later joined Carney in a unified "Team Canada" front to negotiate with Washington.