Trump Threatens New Tariff
Key Highlights
- Canadian officials clarified that their agreement with China does not violate US-Canada trade commitments under CUSMA.
- Experts suggest that implementing such tariffs on energy and auto products is unlikely due to economic and political considerations.
- The situation underscores ongoing tensions between the US, Canada, and China over trade policies and international economic relations.
On Saturday, Jan. 24, 2026, Trump threatened to place a 100% tariff on goods from Canada. This was in response to its trade partnership with China.
“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 U.S.A.,” Trump said in a Truth Social post on Saturday. Trump did not provide additional details about the potential levies.
In early January, Canada and China came to a preliminary agreement to lower tariffs and expand market access for goods from both countries. China is expected to lower duties on several Canadian food exports, while Canada is expected to reduce levies on an annual quota of 49,000 electric vehicles made in China.
Much of the stipulations in the agreement are set to start by March. In a post Trump made on Turth Social remarking on the preliminary agreement he said, "China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life."
Canada Prime Minister, Mark Carney said on Sunday, Jan. 25, 2026 that the agreement with China was created "to rectify issues created in the last couple of years." That it did not serve as a complete free trade deal. Which would violate terms of the United States- Mexico- Canada agreement (known in Canada as CUSMA).
“We have commitments under CUSMA not to pursue free trade agreements with non-market economies without prior notification,” Carney said. “We have no intention of doing that with China or any other non-market economy.”
If Trump follows through on his threats, it would cause an inflationary spike in the U.S.
“Do I think there is any chance POTUS goes through with this threat, especially for energy products? Absolutely no chance,” Jason Miller, an Eli Broad endowed professor of supply chain management at Michigan State University, said in a LinkedIn post, noting that crude oil, cars and auto parts are among the top exports from Canada to the U.S.
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