Tariff Showdown: Trump’s 100% tariff threat to Canada on Trade with China

In a dramatic escalation of North American trade tensions, U.S. President Donald Trump has threatened to impose a staggering 100% tariff on Canadian imports if Ottawa goes ahead with a pending trade deal with China.

Earlier this month, Canadian Prime Minister Mark Carney travelled to China and resolved several tariff disputes with Beijing.

Initially, Trump appeared supportive of Canada’s engagement with China but after Carney criticized Trump’s pursuit of Greenland and delivered remarks in Davos advocating for cooperation among middle powers, Trump has changed his stand.

Message from Trump

On his social media platform Truth Social, Trump issued a blunt warning, claiming that “China will eat Canada alive,” and warned that Canadian businesses, social fabric, and way of life would be harmed if the trade deal with China was finalized.

His administration argues that a Canada and China trade agreement could create a pathway for Chinese goods to enter the U.S. market via Canada, potentially undermining existing American tariffs on Chinese products. Trump has called this the risk of Canada acting as a “drop off port” for Chinese goods. 

Canadian Response

Canada has not directly pursued a comprehensive free-trade agreement with China, according to Trade Minister Dominic LeBlanc. Instead, Ottawa says the deal with China focused on resolving specific tariff issues with Beijing.

In response to threats, Carney has encouraged Canadians to support domestic industries and emphasized economic resilience in the face of global uncertainty.

Which industries could be the most affected?

If implemented, a 100% tariff would effectively double the cost of Canadian goods entering the U.S. market, squeezing key sectors of the Canadian economy including:

Source: Reuters reporting and trade projections

This tariff threat comes at a time of heightened global economic uncertainty. While Canada seeks to balance its trade relationships across the world, the United States contends with major trade rivalries , especially with China. The tariff threat underscores how trade policy is increasingly being wielded as a geopolitical tool rather than solely an economic lever.

For Canada, whose economy has been deeply integrated with the U.S. for decades, the possibility of steep new tariffs raises questions about long-term strategy and economic diversification.

For the USA, this move signals a continuation of America’s assertive stance toward economic engagement with China and allied nations that pursue closer ties with Beijing.

The threat of a 100% tariff on Canadian goods over a pending trade deal with China represents a significant escalation in U.S.–Canada relations. Whether such a tariff is ever implemented remains uncertain, but the situation reflects a broader global trend: trade policy is no longer just about economics, it’s a central arena of geopolitical competition.