On 16 January, speaking to reporters outside the White House, Trump had welcomed the effort. “That’s what he should be doing,” the president said at the time. “If you can get a deal with China, you should do that.” Saturday’s statement supersedes that position, placing a potential 100 percent tariff atop the 35 percent duty Washington has applied to most Canadian exports since August 2025.
The higher tariff would, if enacted, expand duties far beyond the limited set of Canadian goods—such as steel, copper and certain automobiles—currently subject to levies despite the Canada-United States-Mexico Agreement (CUSMA). That trade pact, known as USMCA in the United States, generally eliminates tariffs on continental commerce, according to the Office of the United States Trade Representative.
Matthew Holmes, executive vice-president and chief of public policy at the Canadian Chamber of Commerce, issued a statement after Trump’s post. “Canada’s government has transparently outlined that the agreement with China is fundamentally about domestic consumers and businesses in Canada and China, not schemes aimed at other markets,” Holmes said. He emphasized that closer ties with Beijing “are not to replace our deeply rooted relationship with the United States that continues to be overwhelmingly good for workers, consumers and North American competitiveness.”
The White House and the office of the Canadian prime minister did not respond to requests for comment on the president’s threat. Canadian officials have not indicated whether Ottawa would alter its approach to the Chinese negotiations in light of the warning.
Saturday’s tariff announcement followed another rupture in bilateral relations. On Friday, Trump rescinded an invitation for Canada to join his proposed “Board of Peace,” a multilateral forum the administration says will advise on conflict prevention. Carney, speaking at the World Economic Forum in Davos, Switzerland, had urged “middle powers” to cooperate in resisting economic coercion from larger nations. After that address, Trump withdrew the pending invitation; membership in the body would require a one-time payment of US$1 billion for a permanent seat.
Trade tensions between Washington and Ottawa escalated throughout Trump’s second term. In August 2025, the administration raised the tariff rate on Canadian goods from 18 percent to 35 percent, citing what officials described as persistent imbalances and insufficient access for U.S. products. Canadian exporters of raw metals and certain automotive parts have absorbed those higher costs for nearly six months. The president’s latest statement significantly widens the potential scope of restrictions, placing industries such as lumber, dairy and technology hardware at risk of steep price increases if the policy is implemented.
The prospect of a 100 percent tariff also injects uncertainty into supply chains that cross the 5,500-mile border. Canada is the United States’ largest trading partner by goods volume, with two-way trade exceeding US$2 billion per day, according to U.S. Census Bureau data. A blanket duty would affect sectors ranging from energy to consumer packaged goods, potentially disrupting long-established logistical networks throughout North America.
China has not publicly commented on Trump’s warning. Beijing’s concession on Canadian agricultural imports, outlined in the preliminary deal, was widely viewed by analysts as an effort to diversify food supplies and reduce dependence on the U.S. farm belt. For Canada, expanded quotas for Chinese electric vehicles serve domestic climate targets while offering consumers lower-cost options. Neither side detailed enforcement mechanisms intended to prevent transshipment of Chinese products to the United States via Canadian ports.
Under CUSMA, any member may seek arbitration if another member unilaterally imposes new barriers. Ottawa could invoke that process should Washington proceed with the 100 percent tariff, but dispute panels typically take months to deliver findings, leaving immediate economic effects unmitigated. Canadian officials have not indicated whether they plan to request consultations under the agreement’s formal mechanisms.
In past disputes, U.S. tariffs on Canadian imports have triggered proportional countermeasures. After the Trump administration raised duties on Canadian steel and aluminum in 2018, Ottawa responded with tariffs on U.S. whiskey, ketchup and other goods before both governments negotiated a removal of the measures in 2019. Whether Canada would adopt a similar retaliatory approach this time remains unclear.
Business groups on both sides of the border urged calm. The Canadian Manufacturers & Exporters association said in a brief statement that companies “require stability and predictability” to maintain investment plans. In the United States, the National Retail Federation warned that higher duties could lift consumer prices at a time when the Federal Reserve is attempting to keep inflation under control.
For now, the proposed Canada-China accord remains incomplete. Government negotiators were expected to reconvene in Beijing next month to finalize chapters on intellectual property and environmental standards. Trump’s ultimatum adds a new variable to those talks, raising the possibility that Ottawa could seek revisions or delay concluding the agreement.
Crédito da imagem: Mandel Ngan/AFP/Getty Images
