US President Donald Trump has threatened Canada with 100% tariffs on all exports to the United States if it strikes a trade deal with China, sharply escalating tensions between Washington and its northern neighbor.
In a recent series of comments, Trump referred to Canadian Prime Minister Mark Carney as “Governor Carney” and stated that Ottawa is “making a serious mistake” by allowing China to increase supplies of electric vehicles. The US president also joked provocatively, suggesting that he would not mind if Canada were to become the 51st state of the United States.
“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 US,” Trump wrote.
The statement follows last week’s agreement between Canada and China to significantly reduce trade barriers and restore economic ties. This move has been interpreted as a signal that Ottawa is adjusting its foreign trade policy and diverging from Trump’s trade agenda.
For his part, Carney indicated that he expects China to lower its tariffs on Canadian canola seed following his meeting with Chinese President Xi Jinping. The visit marked the first trip by a Canadian leader to Beijing in eight years.
As part of the agreement reached, Canada has agreed to allow up to 49,000 Chinese electric vehicles into its market at a tariff rate of around 6%, thereby eliminating the previous 100% surcharge. According to Carney, Beijing will also offer Canadian citizens visa-free entry.
Thus, Ottawa’s trade maneuver could force Canada to choose between the Chinese market and US tariffs. Either option promises to be costly.