Quick overview

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President Donald Trump cautioned Canada that a trade agreement with China would impose a 100% tariff on goods sold in the US. “Canada will immediately face a 100% tariff on all Canadian goods and products entering the United States if it strikes a deal with China. The president stated in a post on Truth Social.

 

Additionally, Trump hinted on Saturday that China might try to use Canada to avoid paying the United States.  Trump declared, “Governor Carney is gravely mistaken if he believes he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States.”

Prime Minister Mark Carney declared earlier this month that Canada and China had reached a preliminary agreement to lower tariffs and remove trade barriers. In accordance with the provisional agreement, Ottawa raised the quotas for imports of Chinese electric vehicles using the most-favored-nation tariff rate of 6.1 percent, and Beijing reduced tariffs on several Canadian agricultural products.

Trump increased the tariff on Canadian goods to 35 percent in August 2025. Under the Canada-US-Mexico Agreement (CUSMA), most Canadian exports are exempt from duties; however, some products, such as steel, copper, and some cars and auto parts, are subject to US tariffs.

Following Carney’s speech at the World Economic Forum in Davos, which warned against economic coercion by the world’s superpowers, Trump withdrew Canada’s invitation to join his “Board of Peace,” and the new tariff threat follows. Carney stated in his speech that in order to fend off pressure from the world’s biggest powers, the “middle powers”  must unite.

Carney stated last week that although the specifics had not yet been finalized, he planned to join the board. A $1 billion fee would be required for states to apply for a permanent board seat.