Trump Threatens Canada With 100% Tariffs Over China Trade Deal

U.S. President Donald Trump threatened to impose 100% tariffs on all Canadian imports if Canada proceeds with a trade deal with China. The escalation follows a January 16 agreement where Prime Minister Mark Carney reduced tariffs on up to 49,000 Chinese electric vehicles to 6.1% in exchange for China lowering duties on Canadian agricultural exports, including canola. 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 peaked at 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 suggesting Canada be absorbed as a 51st U.S. state. While U.S. Treasury Secretary Scott Bessent claimed Carney aggressively walked back these remarks during a subsequent phone call, Carney maintained he stood by his statements.

Canada is treating the threats as "prepositioning" ahead of the mandatory July 1 review of the United States-Mexico-Canada Agreement (USMCA). To mitigate risks, Carney has launched a "buy Canadian" policy and a broader strategy to double non-U.S. exports within a decade, including deepening ties with India. Canadian officials, including Trade Minister Dominic LeBlanc, have clarified that the China arrangement is a narrow sector-specific deal and not a comprehensive free-trade agreement, which would violate USMCA commitments.