President Donald Trump on Saturday threatened to impose 100% duties on Canadian imports should America’s second-largest trading partner forge a trade arrangement with China.
These remarks risk widening the gulf between Trump and Canadian Prime Minister Mark Carney, following earlier threats to slap tariffs on Canadian goods, including 10% duties, after an Ontario advertisement featured former President Ronald Reagan discussing tariffs.
Trump mockingly referred to Carney as a “governor”—a label he also applied to former Prime Minister Justin Trudeau—playing on the latter’s past suggestion of Canada becoming the 51st U.S. state.
“If Governor Carney thinks making Canada a ‘beachhead’ for China to ship goods and products into the United States is a good idea, he is badly mistaken. China will devour Canada alive, completely absorb it, including destroying their businesses, social fabric, and overall way of life,” Trump posted on Truth Social.
“The last thing the world needs is for China to take over Canada. That will NOT happen, not even close!” the president added in a follow-up post on his social media platform.
This represents a reversal from Trump’s prior statements. The President told reporters on January 16, “It’s a good thing for (Carney) to sign a trade deal. If you can make a deal with China, he should do that.”
Trump ‘Lashes Out’ at Other Economies
Earlier this month, Carney met with Chinese President Xi Jinping on Canadian soil, where they established a “new strategic partnership,” leading Canada to ease tariffs on Chinese electric vehicles and allow up to 49,000 Chinese EVs annually into its market. China is also anticipated to reduce tariff barriers on Canadian canola seed, lobster, and peas later this year.
It remains unclear what specific action would qualify as an “agreement” intended to trigger tariffs against Canada. The White House did not immediately respond to CNN’s request for comment.
“As the Prime Minister (Carney) stated this week, Canada and the United States enjoy a remarkable partnership in economy and security, and we will continue to ensure that the future of this relationship benefits workers and businesses on both sides of the border,” wrote Canadian Finance Minister Dominic LeBlanc on X following Trump’s comments. “There is no pursuit of a free trade agreement with China. A resolution has been reached on several important tariff matters.”
Trump’s threat emerged after Carney paved the way for Canada on Tuesday by warning that stronger nations weaponize “economic integration,” use “tariffs as leverage,” and treat “supply chains as vulnerabilities to exploit.”
While he avoided naming the U.S. during his address at the World Economic Forum in Davos, Switzerland, Carney characterized it as a global “breakdown” rather than a transition period, adding that “middle powers must stand together because if we are not at the table, we are on the menu.”
The threat also came just a week after Trump pledged to impose a 10% tariff on “any and all goods” from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1st unless a deal was reached for the U.S. purchase of Greenland. However, Trump stated Wednesday that the tariffs were no longer necessary as a framework had been established.
“It seems Trump is attacking Carney for stealing the spotlight in Davos. (Trump) didn’t get his Greenland tariffs, so now he’s looking for another target to threaten,” commented Inu Manak, a senior fellow for international trade at the Council on Foreign Relations.
Uncertain Economic Impact
The effect of these new 100% tariffs, if and when implemented, is unclear. Canadian goods covered by the U.S.-Mexico-Canada Agreement (USMCA) are exempt from Trump’s other levies. Trump negotiated this agreement during his first term, and it is up for review this year.
Manak informed CNN via email that the USMCA permits countries to dissolve the agreement if one party enters into a free trade deal with a non-market economy like China. But if Trump claims Canada violated the USMCA with its latest accord with China, it could subject the U.S. soy deal with China to similar scrutiny, she added.
“It doesn’t make sense for Trump to bring this up right now, so I think he’s just making an arbitrary tariff threat,” she said.
Trump’s steep sectoral tariffs on automobiles, steel, aluminum, lumber, and energy—some of the country’s key exports to the U.S.—have hit Canada particularly hard. Canada’s unemployment rate hit a nine-year high in October.
Last year’s tariff threats “already broke the trade agreement,” stated Erica York, senior fellow for federal tax policy at the Tax Foundation.
“If (Trump) follows through, it would mean the U.S. is imposing tougher trade restrictions on Canadian imports than on Chinese imports,” she added.
This also hurts the U.S. economy due to Canadian boycotts. Data from Statistics Canada showed that the number of Canadian overland trips to the U.S. dropped 31% this year through the end of September. U.S. distilled spirits exports to Canada plunged 85% in the second quarter, according to the Distilled Spirits Council of the U.S.
Trump’s threats to apply duties on Canada might become yet another instance where Trump backs down, something investors have dubbed “TACO,” or “Trump Always Cawks Out.”
York doubts that Trump’s latest threat of 100% tariffs will materialize. But the warning itself “illustrates how unpredictable and unreliable U.S. trade policy is at this moment.”
The Supreme Court is expected in the coming weeks to rule on whether Trump can utilize emergency powers granted by the International Emergency Economic Powers Act (IEEPA) to impose tariffs. Judges have expressed skepticism about the Trump administration’s application of this act, as it does not explicitly mention tariffs.
Trump’s comments on Truth Social also followed heated exchanges between the two leaders.
“Canada lives off the United States,” Trump stated Wednesday during a speech at the World Economic Forum in Davos. “Remember that, Mark, the next time you make your statements.”
Carney responded Thursday: “Canada does not live off the United States. Canada thrives because we are Canadian.”
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