U.S. President Donald Trump on Saturday threatened to place a 100% tariff on goods from Canada in response to its burgeoning trade partnership with China.
“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.,” Trump said in a Truth Social post on Saturday. Trump did not provide additional details about the potential levies.
Earlier this month, Canada and China came to a “preliminary agreement in-principle” to lower tariffs and expand market access for goods from both countries. Per the terms of the pact, China is expected to lower duties on several Canadian food exports, including canola seed, while Canada said it would reduce levies on an annual quota of 49,000 electric vehicles made in China.
Many of the provisions in the pact are set to start by March. It’s unclear whether Trump’s threat is effective as of the preliminary deal, or if the threat is geared toward the March 1 timeline.
Trump said in his post the proposed deal would make Canada a “drop off port” for China.
“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” he said.
Canada Prime Minister Mark Carney said Sunday that the preliminary agreement with China was meant to rectify “issues that developed in the last couple of years” and not serve as the framework of a complete free trade deal. Such an agreement would violate terms of the United States-Mexico-Canada Agreement, known in Canada as CUSMA, Carney said.
“We have commitments under CUSMA not to pursue free trade agreements with non-market economies without prior notification,” Carney said. “We have no intention of doing that with China or any other non-market economy.”
If Trump follows through on his tariff threat for goods from Canada, it “would result in a significant inflationary spike” in the U.S., according to Jason Miller, Eli Broad endowed professor of supply chain management at Michigan State University.
“Do I think there is any chance POTUS goes through with this threat, especially for energy products? Absolutely no chance,” Miller said in a LinkedIn post, noting that crude oil, cars and auto parts are among the top exports from Canada to the U.S.
Although Trump installed a 35% levy on goods from Canada last summer, products that qualify for United States-Mexico-Canada Agreement treatment were exempted. Per Miller, the effective tariff rate for all Canada imports was 3.89% as recently as October.
Trump has previously leveraged tariffs in an effort to advance his international agenda. Last week, he threatened to install fresh levies on eight European nations that oppose his push to annex Greenland. Trump later walked back the threat, but not before the European Union suspended a trade deal framework with the U.S. that was formalized in August.
Editor’s note: This story was updated to include comments from Canada Prime Minister Mark Carney in response to U.S. President Donald Trump’s tariff threat.
