Tensions rise as Canada seeks to balance US economic ties with a strategic partnership with China.
President Donald Trump threatened to impose a 100% tariff on all Canadian goods entering the US if Canada proceeds with a trade agreement with China.
“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.,” Trump said via his Truth Social account, responding to a report about Canadian Prime Minister Mark Carney’s attempts to deepen the nation’s relationship with China.
Trump accused Carney of attempting to make Canada a “drop off port” for Chinese goods bound for the US market.
“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” Trump said.
Canada and China announced a trade agreement on January 16 that includes tariff reductions across multiple sectors. Under the deal, Canada will lower its surtax on Chinese electric vehicles from 100% to 6.1%, allowing up to 49,000 annual imports.
China agreed to reduce tariffs on Canadian canola seeds from approximately 85% to 15% by March 1. The agreement also extends tariff relief on Chinese steel and aluminum through the end of 2026.
However, Carney’s push to build closer ties with Beijing raises questions about the consistency of his warnings that the global, rules-based order, which he claims to be defending against disruption from the US under Trump, is under threat.
Moreover, Canada’s heavy dependence on the US economy poses a major obstacle.
Canada sends over 75% of its exports to the US, compared with a small share to China. US officials argue that China’s industrial overcapacity and rising global trade barriers make it unrealistic to increase Canadian exports to China.
Analysts suggest Carney may ultimately abandon his China pivot and return to close cooperation with the US.
