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Monday, Jan 26, 2026
Outside the box.
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White House: Trump warns Canada of 100% tariff if Carney finalizes China trade deal
Carney says Ottawa has no plans for a free trade agreement with China under USMCA rules.
In Washington on Saturday, President Donald Trump said the United States would impose a 100% tariff on imports from Canada if Canada proceeds with a trade deal with China, escalating tensions with Canadian Prime Minister Mark Carney.
Trump characterized the prospective Canada-China arrangement as a pathway for Chinese goods to reach the U.S. market through Canada, framing the threatened tariff as a defensive step to block what he described as circumvention of U.S. trade barriers.
Carney responded by saying Canada has no intention of pursuing a free trade agreement with China and described Canada’s recent engagement as targeted and limited, not a sweeping reorientation of Canada’s trade policy.
Carney also pointed to constraints under the United States-Mexico-Canada Agreement, which restricts certain trade arrangements with “nonmarket economies” without prior notice, positioning Canada’s approach as bounded by its existing North American commitments.
The immediate flashpoint is a Canada-China understanding described as selective tariff adjustments: Canada reducing elements tied to its 100% tariff on Chinese electric vehicles while China eases tariffs affecting Canadian exports including canola and pork.
Confirmed vs unclear: What we can confirm is Trump threatened a 100% tariff on Canadian imports if Canada proceeds with a China trade “deal” / What’s still unclear is whether the Canada-China arrangement is being treated as a broad free trade pact or limited, sector-specific tariff changes.
On the U.S. side, the stated rationale is that a sharply higher tariff would remove any incentive to route Chinese-made goods through Canada into the United States, using a single, across-the-board measure rather than product-by-product enforcement.
On the Canadian side, the stated rationale is that limited tariff adjustments can address specific trade frictions and protect Canadian exporters while staying within USMCA obligations; the practical next step is whether Washington issues a formal tariff action and whether Ottawa further clarifies the scope and terms of its China-related changes.
Trump characterized the prospective Canada-China arrangement as a pathway for Chinese goods to reach the U.S. market through Canada, framing the threatened tariff as a defensive step to block what he described as circumvention of U.S. trade barriers.
Carney responded by saying Canada has no intention of pursuing a free trade agreement with China and described Canada’s recent engagement as targeted and limited, not a sweeping reorientation of Canada’s trade policy.
Carney also pointed to constraints under the United States-Mexico-Canada Agreement, which restricts certain trade arrangements with “nonmarket economies” without prior notice, positioning Canada’s approach as bounded by its existing North American commitments.
The immediate flashpoint is a Canada-China understanding described as selective tariff adjustments: Canada reducing elements tied to its 100% tariff on Chinese electric vehicles while China eases tariffs affecting Canadian exports including canola and pork.
Confirmed vs unclear: What we can confirm is Trump threatened a 100% tariff on Canadian imports if Canada proceeds with a China trade “deal” / What’s still unclear is whether the Canada-China arrangement is being treated as a broad free trade pact or limited, sector-specific tariff changes.
On the U.S. side, the stated rationale is that a sharply higher tariff would remove any incentive to route Chinese-made goods through Canada into the United States, using a single, across-the-board measure rather than product-by-product enforcement.
On the Canadian side, the stated rationale is that limited tariff adjustments can address specific trade frictions and protect Canadian exporters while staying within USMCA obligations; the practical next step is whether Washington issues a formal tariff action and whether Ottawa further clarifies the scope and terms of its China-related changes.
