Trump threatens to impose 100% tariff if Canada makes deal with China

• Canada and China reached a preliminary agreement allowing up to 49,000 Chinese EVs into Canada at a 6.1% tariff rate, while China would lower tariffs on Canadian canola seed to approximately 15%
• Trump reversed his position within one week, having previously stated on Jan. 16 that 'If you can get a deal with China, you should do that'
• The threat follows Carney's address at the World Economic Forum where he urged 'middle powers' to resist economic coercion from superpowers

Summary

Key Development: President Donald Trump threatened to impose a 100% tariff on all Canadian goods entering the U.S. if Canada finalizes a trade deal with China, warning that China might use Canada as a "drop-off port" to circumvent U.S. tariffs.

Main Players:

• United States: President Donald Trump
• Canada: Prime Minister Mark Carney
• China: Target of U.S. trade restrictions

Critical Details:

• Canada and China recently reached a preliminary agreement to reduce trade barriers
• Under the tentative deal, Canada would allow up to 49,000 Chinese electric vehicles at a 6.1% most-favored-nation tariff rate
• In exchange, China would lower tariffs on Canadian canola seed to approximately 15%
• Trump initially supported the Canada-China deal on January 16, calling it "a good thing," but reversed his position within days

Trade Context:

• Most Canadian exports enter the U.S. duty-free under the Canada-U.S.-Mexico Agreement (CUSMA)
• Some goods, including steel, copper, and certain automotive products, already face U.S. tariffs
• Trump previously raised tariffs on Canadian goods in August 2025

Market Implications:

This abrupt policy reversal creates significant uncertainty for Canadian exporters and U.S. importers of Canadian goods. The threat targets strategic sectors including electric vehicles and agricultural products. The escalating tensions could disrupt North American supply chains and complicate existing trade agreements. Carney's recent comments at the World Economic Forum about "middle powers" resisting coercion from superpowers appear to have contributed to the deteriorating relationship.

The situation remains fluid and represents a developing story with potential broad impacts across multiple sectors.