U.S. President Donald Trump has threatened to impose 100% tariffs on Canadian goods, accusing Ottawa of undermining U.S. interests through a recent trade deal with China, in a sharp escalation of economic and diplomatic tensions between the two countries.
Trump said the proposed tariffs would target key Canadian exports if Canada continues to deepen economic ties with Beijing. He framed the move as a necessary step to protect U.S. industry and national security, arguing that China-linked supply chains pose strategic risks.
The warning has sent shockwaves through Canadian political and business circles, with officials cautioning that such tariffs could severely disrupt North American trade, raise consumer prices, and strain one of the world’s closest economic partnerships. Canada and the U.S. share one of the largest bilateral trading relationships globally, with hundreds of billions of dollars in goods and services crossing the border each year.
Canadian government sources said Ottawa is reviewing the situation and reaffirmed that Canada makes sovereign trade decisions based on national interests, international rules, and economic diversification goals. Analysts say the China deal reflects Canada’s broader push to reduce reliance on the U.S. market amid rising uncertainty in Washington’s trade policy.
Economists warn that a 100% tariff could trigger retaliation, disrupt supply chains in automotive, energy, agriculture, and manufacturing sectors, and potentially spark a broader trade conflict between the two allies. Business groups on both sides of the border urged dialogue, warning that escalating tariffs would hurt workers, investors, and consumers.
The threat also raises concerns about the future of the USMCA trade framework, which was designed to stabilize North American trade relations. Some experts say repeated tariff threats risk eroding confidence in the agreement and could push Canada further toward alternative markets in Asia and Europe.
Trump’s remarks underline a more confrontational approach to allies on trade policy, signaling that strategic alignment may increasingly be tied to economic pressure. As both sides weigh their next steps, the episode marks another flashpoint in an increasingly volatile U.S.–Canada relationship.