President Donald Trump has threatened to impose a 100% tariff on Canadian goods if Canada finalizes a trade deal with China, escalating tensions between the two neighbors.

The move comes as Canada seeks to reset relations with Beijing amid global trade uncertainty.

On Saturday, Trump warned Canadian Prime Minister Mark Carney that any trade deal with China would trigger a 100% tariff on all Canadian exports to the US. Posting on Truth Social, Trump said China would “eat Canada alive,” potentially destroying its businesses, social fabric, and way of life.

Trump also accused Canada of attempting to act as a “drop-off port” for Chinese goods to bypass US tariffs, emphasizing that such a strategy “is NOT going to happen.”

Canada’s trade deal with China

Carney recently traveled to China to strengthen ties and reached a trade deal with the country, Canada’s second-largest trading partner after the US. While supportive initially, Trump’s stance has shifted, citing potential risks to American industries.

In response, Carney urged Canadians to focus on domestic products, stating: “We can’t control what other nations do, we can be our own best customer.” He did not directly address Trump’s tariff threat.

Rising US-Canada tensions

Relations have deteriorated after Carney criticized Trump’s pursuit of Greenland and highlighted the importance of a rules-based global order at the World Economic Forum in Davos. Carney stressed that middle powers must act together to avoid being “on the menu” of larger nations.

Trump responded in Davos by asserting Canada “lives because of the United States,” a remark Carney firmly rejected, emphasizing Canada thrives because of its own sovereignty and achievements.

If Trump enforces a 100% tariff, Canadian industries such as metals, automotive, and machinery could face severe pressure. Trade experts warn that uncertainty may affect business confidence and economic planning, complicating Canada’s efforts to diversify trade.

The Canadian Chamber of Commerce urged both governments to seek a “better understanding quickly” to avoid immediate consequences for businesses.