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Trump tariff threat escalates Canada–US tensions as Ottawa defends a new China trade deal aimed at diversifying exports.

US President Donald Trump has issued a sharp warning to Canada, threatening to impose a 100 percent tariff on all Canadian goods entering the United States if Ottawa moves ahead with its new trade agreement with China.

In a post on Truth Social on Saturday, Trump accused Canada of positioning itself as a gateway for Chinese products into the US market. 

Referring to Canadian Prime Minister Mark Carney, Trump said Canada would face serious consequences if it allowed China to use its economy as a trade channel.

According to Trump, closer economic ties with Beijing could severely damage Canada’s businesses and social stability. His comments mark a dramatic shift from his earlier reaction to the Canada–China agreement.

When Prime Minister Carney announced the deal on January 17 during a visit to Beijing, Trump initially played down concerns. At the time, he told reporters Canada was free to pursue its own trade interests, including reaching an agreement with China.

The deal significantly lowered Canada’s tariff on Chinese electric vehicles, cutting it from 100 percent to 6.1 percent. The agreement allows China to export up to 49,000 electric vehicles to Canada annually, with the quota expected to rise to 70,000 units over five years.

In return, China reduced its tariff on Canadian canola seeds from 84 percent to about 15 percent. Canadian officials said the agreement could open more than $7 billion in new export opportunities for local businesses.

Relations between Washington and Ottawa deteriorated shortly after. Speaking at the World Economic Forum in Davos on January 20, Carney warned that the global order was facing a major rupture. 

He urged middle powers to push back against economic pressure from larger nations that use tariffs as bargaining tools.

Trump responded strongly during his own Davos appearance, accusing Canada of benefiting excessively from the United States. He said Canada depended heavily on American support and should show more appreciation.

Carney rejected the claim, insisting that Canada’s success was rooted in its own national strength rather than reliance on the US.

The dispute widened further when Trump accused Canada of opposing his proposed “Golden Dome” missile defense system, which would extend over Greenland. 

The US government estimates the project could cost about $175 billion, though independent projections suggest much higher long-term expenses.

Canada is already subject to significant US trade penalties, including a 35 percent tariff on several exports and 50 percent duties on steel and aluminium. 

A full 100 percent tariff would be an unprecedented step, especially as around 70 percent of Canadian exports are destined for the US market.

China remains Canada’s second-largest trading partner. In 2024, trade between both countries reached nearly $119 billion.

Carney has announced plans to boost Canadian exports to China by 50 percent by 2030, as part of efforts to reduce reliance on the United States.