In a significant escalation of North American trade tensions, President Donald Trump threatened on Saturday, January 24, 2026, to impose a 100% tariff on all Canadian imports if the country proceeds with its newly forged trade partnership with China.
The threat follows a “preliminary but landmark” agreement reached earlier this month between Canadian Prime Minister Mark Carney and Beijing, which aims to recalibrate trade ties and reduce Canada’s economic reliance on the United States.
The “Drop Off Port” Ultimatum: US vs. Canada-China Pact
President Trump issued the warning via Truth Social, specifically targeting Prime Minister Carneyโs efforts to diversify Canadian exports. Trump argued that the deal would effectively turn Canada into a backdoor for Chinese products to enter the U.S. market.
The Details of the Canada-China Deal
The agreement, which Trump initially signaled support for on January 16 before his sharp reversal this weekend, includes:
- EV Tariff Reduction: Canada agreed to lower its 100% tariff on Chinese Electric Vehicles (EVs) to 6.1%, allowing a quota of 49,000 units annually.
- Agricultural Wins: In exchange, China committed to lowering duties on Canadian canola seed (to 15% by March 2026) and lifting bans on peas, lobster, and crab.
- Strategic Pivot: Prime Minister Carney described the move as a “necessary diversification” during his speech at the World Economic Forum in Davos earlier this week.
Trumpโs Retaliatory Measures
| Action | Impact / Details |
| 100% Tariff Threat | Aimed at all Canadian “goods and products” entering the U.S. if the China deal is finalized. |
| “Governor” Nickname | Trump referred to Carney as “Governor,” a rhetorical swipe suggesting Canada should be the 51st U.S. state. |
| Board of Peace Removal | Trump revoked Carneyโs invitation to join his self-styled global “Board of Peace” for resolving international conflicts. |
| Map Controversy | Trump posted an image of a U.S. map that included Canada, Greenland, and Venezuela covered by the American flag. |
The War of Words: Carney vs. Trump
The tension reached a boiling point following the Davos summit, where Carney spoke of a “rupture” in the U.S.-led global order.
- Trump’s View: “China will eat Canada alive, completely devour it… if Canada makes a deal with China, it will immediately be hit with a 100% Tariff.”
- Carneyโs Response: “Canada doesn’t live because of the United States. Canada thrives because we are Canadian.”
- Trade Minister’s Stance: Dominic LeBlanc clarified that Canada is not pursuing a free trade deal with China, but rather a resolution on specific “tariff-related issues” to protect Canadian farmers.
Economic Implications: A $400 Billion Risk
Canada is the United States’ largest trading partner, with over $2.5 billion in goods crossing the border daily.
- USMCA Buffer: While the USMCA (United States-Mexico-Canada Agreement) currently protects many sectors from sweeping tariffs, Trump has labeled the agreement “irrelevant” in the context of national security threats posed by Chinese influence.
- Supply Chain Shock: Economists warn that a 100% tariff on Canadian crude oil, auto parts, and steel would cause an “inflationary spike” in the U.S., as many American refineries and factories are built specifically to process Canadian raw materials.
Conclusion: A Testing Time for the Alliance
The 100% tariff threat is the most severe ultimatum issued to Canada since the return of the Trump administration. With the Canada-China pact provisions set to begin in March 2026, the next few weeks will be critical for diplomatic negotiations. Analysts are watching to see if Trump will use this threat as a “negotiating hammer” for the upcoming USMCA review scheduled for later this year.
