US-Canada trade tension escalates as Trump threatens with 100% tariff if China deal proceeds

US President Donald Trump has escalated tensions with Canada, threatening to impose a 100% tariff on Canadian goods if Canada strikes a trade deal with China. Trump tweeted that if Ottawa makes a deal with China, it will be hit with a 100% tariff on all Canadian goods and products coming into the US. He also warned Canadian Prime Minister Mark Carney that a deal would endanger his country.

Trump warns of 100% tariff on Canada over China deal

"China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life," Trump wrote on Truth Social. "If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A," he added.

“If Governor Carney thinks he is going to make Canada a 'Drop Off Port' for China to send goods and products into the United States, he is sorely mistaken,” Trump said in reference to the recent landmark Canada-China trade agreement.

Trump Carney's war of words

Trump's latest move comes after he withdrew Canada's invitation to join his Board of Peace initiative, after Canadian Prime Minister Mark Carney's veiled attack on his policies during a speech at the World Economic Forum in Davos. In his speech, Carney criticised powerful nations for using economic integration as a weapon and tariffs as leverage. Trump responded by saying Canada "lives because of the United States" and should be grateful, prompting Carney to fire back that "Canada thrives because we are Canadian."

Trump's decision came after Carney's remarks, where he emphasised the need for middle powers like Canada to unite against economic coercion and promote a rules-based international order. Trump responded by saying Canada "lives because of the United States" and should be grateful, prompting Carney to fire back that "Canada thrives because we are Canadian

What is Canada-China trade deal?

On January 17, Canadian Prime Minister Mark Carney announced a new trade agreement with China. Carney said that the deal would open markets for Canadian businesses and workers. In a post on X, Carney said, "We've secured a new trade agreement with China -- unlocking more than $7 billion in export markets for Canadian workers and businesses."In a statement by the Canadian Prime Minister's Office said, "In a more divided and uncertain world, Canada is building a stronger, more independent, and more resilient economy. To that end, Canada's new government is working with urgency and determination to diversify trade partnerships and catalyse massive new levels of investment. As the world's second-largest economy, China presents enormous opportunities for Canada in this mission."Canada has agreed to cut its 100 per cent tariff on Chinese electric cars in return for lower tariffs on Canadian farm products, CBS News reported.

Carney said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports to Canada, growing to about 70,000 over five years. China will reduce its total tariff on canola seeds, a major Canadian export, from 84 per cent to about 15 per cent, as per CBS News.Carney said China has become a more predictable partner to deal with than the US."Our relationship has progressed in recent months with China. It is more predictable and you see results coming from that," Carney said, as quoted by CBS News.Canada faces 35 per cent levy on its goods. Canada is affected by the blanket 50 per cent levy on imported metals and 25 per cent on non-US automobiles.

(With inputs from ANI)