New Delhi: US President Donald Trump on Saturday threatened to impose a 100% tariff on all Canadian goods if Ottawa proceeds with a new trade agreement with China, sharply escalating tensions between Washington and its northern neighbour.
The warning follows Canadian Prime Minister Mark Carney’s visit to Beijing last week, where the two sides struck a deal under which Canada will ease tariffs on Chinese electric vehicles—duties that had been imposed in coordination with the United States in 2024. In return, China agreed to lower retaliatory tariffs on key Canadian agricultural exports.
Trump Reacts Strongly
Trump lashed out at the agreement in a post on Truth Social, accusing Canada of risking its economic sovereignty and acting as a conduit for Chinese goods into the US market.
“If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump wrote, using a nickname previously applied to Carney’s predecessor, Justin Trudeau.
“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” he added.
“If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A.”
Davos Speech Added Fuel To Fire
Trump’s reaction was further inflamed by Carney’s speech at the World Economic Forum in Davos, where the Canadian prime minister vowed to diversify Canada’s economic partnerships and reduce dependence on the United States.
In his address, Carney criticised Washington’s growing use of coercive economic measures against allies and urged middle powers to work more closely together to resist great-power dominance. His remarks drew a rare standing ovation from global leaders in attendance.
The speech reportedly angered Trump, who belittled Canada in his own Davos address a day later and withdrew a Board of Peace invitation that had been extended to Carney.
US-Canada Ties Under Strain
Relations between Washington and Ottawa have deteriorated since Trump returned to the White House last year. The US president has repeatedly floated the idea of making Canada the 51st US state and has also threatened to annex Greenland, a Danish territory located east of Canada.
Despite pressure from Washington, Canada has set an ambitious target to increase exports to China by 50% by 2030. Carney has pledged to significantly expand non-US trade over the next decade and is reportedly planning a visit to India in the coming months as part of that strategy.
Growing Global Trade Fractures
The standoff highlights widening fractures in the global trading system, as traditional US allies seek to hedge against economic uncertainty by strengthening ties with other major markets — even at the risk of provoking Washington.