US President Donald Trump on Saturday issued a sharp warning to Canada, threatening to impose a sweeping 100% tariff on all Canadian goods if Ottawa proceeds with closer trade arrangements with China. In a post on Truth Social, Trump cautioned Canadian Prime Minister Mark Carney that any such deal would seriously endanger Canada’s economic and social stability, using stark language to argue that China would ultimately dominate and hollow out the country.
Trump claimed that Beijing would seek to overwhelm Canada economically and culturally, warning that Chinese influence would lead to the destruction of Canadian businesses, social cohesion, and way of life. He added that if Canada were to finalise a deal with China, the United States would respond immediately by slapping a 100% tariff on all Canadian products entering the US market, dramatically escalating trade tensions between the two neighbours.
In response, Carney released a video message on Saturday urging Canadians to prioritise domestic consumption and support local industries. While he did not directly address Trump’s tariff threat, he framed his remarks around economic resilience, saying that in a period of external pressure, Canadians should focus on what they can control and act as their own strongest customers rather than relying on uncertain global conditions.
Earlier this month, Carney travelled to China in an effort to reset relations that had been strained for several years. During the visit, Canada reached an agreement addressing a number of trade-related issues with its second-largest trading partner after the United States. Interestingly, Trump initially appeared supportive of the outreach, telling reporters at the White House on January 16 that it was a positive step for Carney to pursue a deal with China if it served Canada’s interests.
However, the Canadian government later sought to clarify the scope of the engagement. Dominic LeBlanc, the minister responsible for Canada–US trade, said in a post on X that Ottawa was not pursuing a comprehensive free trade agreement with China. Instead, he said, the discussions focused on resolving specific tariff-related issues rather than opening the door to a broader trade pact.
Tensions between Washington and Ottawa have intensified in recent days, particularly after Carney publicly criticised Trump’s interest in Greenland. Trump, in turn, suggested that China might attempt to use Canada as a conduit to bypass US tariffs. Referring to Carney with a title he has previously used when floating the idea of Canada becoming the 51st US state, Trump warned that Canada would not be allowed to serve as a “drop-off port” for Chinese goods destined for the American market.
In a follow-up post the same day, Trump doubled down on his rhetoric, insisting that the world could not allow China to “take over” Canada and asserting that such an outcome would never be permitted. If implemented, the threatened tariff would represent a massive increase in US duties on Canadian imports, placing heavy strain on key Canadian industries such as metal manufacturing, automotive production, and industrial machinery.
Relations between Trump and Carney had appeared relatively stable until recently. That changed after Carney, speaking at the World Economic Forum in Davos, argued that the era of a rules-based global order was effectively over. Without naming Trump or the United States directly, he called on so-called middle powers to cooperate more closely to avoid being marginalised or exploited by larger, more dominant states, a remark that drew a standing ovation from many global leaders and business executives in attendance.
Trump responded sharply in his own Davos remarks, claiming that Canada “lives because of the United States,” a statement Carney firmly rejected days later while speaking in Quebec. Carney said that while Canada and the US have built a strong partnership in economic, security, and cultural terms, Canada does not merely survive because of its southern neighbour, but thrives because of its own national strength and identity.
Since that exchange, Trump has taken a harder line toward Canada, including revoking its invitation to a proposed Board of Peace he has promoted as a mechanism to address international conflicts and the future of Gaza. This marks a notable shift from the more cordial tone the two leaders shared after Carney’s election last year, when Trump said he expected the bilateral relationship to remain strong.
Trump has also recently dismissed the major trade agreement between the United States, Canada, and Mexico—scheduled for renegotiation in July—as irrelevant. While Trump has frequently issued tariff threats since returning to the presidency, he has at times paused or withdrawn them during negotiations, as seen this week when he softened his stance toward European allies following assurances from NATO leaders on Arctic security.
Canadian business groups have expressed growing concern over the uncertainty created by the escalating rhetoric. In a statement, Matthew Holmes of the Canadian Chamber of Commerce said businesses are hoping both governments can quickly reach a better understanding to ease tensions and reduce the immediate risks faced by companies caught in the middle of rapidly shifting trade policies.
