Canadian Prime Minister Mark Carney pushed back forcefully against U.S. President Donald Trump’s threat to impose 100% tariffs on all Canadian goods, insisting Ottawa has no plans for a free trade deal with China. The exchange, unfolding over social media and public statements, underscores deepening frictions in North American trade relations amid Trump’s aggressive tariff strategy. Carney, speaking in Quebec City on January 25, 2026, clarified that a recent agreement with Beijing merely addressed specific tariff disputes, capping Chinese electric vehicle imports at 49,000 units annually at a 6.1% rate, rising to 70,000 over five years.

Trump’s salvo came via Truth Social on January 24, where he warned, “If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken.” He followed up, claiming “China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen. I only hope they leave Ice Hockey alone! President DJT.” The U.S. leader also shared a video from the Canadian Vehicle Manufacturers’ Association CEO, who warned that without U.S. market access, Canada’s auto sector would collapse, as its domestic market is too small for large-scale production.

U.S. Treasury Secretary Scott Bessent amplified the concerns on ABC News, stating, “We can’t let Canada become an opening that the Chinese pour their cheap goods into the U.S.” This rhetoric reflects fears that Canada could serve as a backdoor for Chinese exports evading U.S. duties, a worry heightened by Carney’s January 16 visit to Beijing, where he secured lower Chinese tariffs on Canadian canola oil, pork, and seafood in exchange for EV concessions.

Roots of the Tariff Tit-for-Tat

The dispute traces back to 2024, when Canada mirrored U.S. tariffs by slapping 100% duties on Chinese EVs and 25% on steel and aluminum. China retaliated with 100% tariffs on Canadian canola and 25% on pork and seafood. The recent pact rectified these, with China dropping canola tariffs from 85% to 15% by March and exempting certain agriproducts until 2026 end, per AP News. Carney emphasized USMCA obligations: “under the free trade agreement with the U.S. and Mexico there are commitments not to pursue free trade agreements with nonmarket economies without prior notification. We have no intention of doing that with China or any other nonmarket economy.”

Trump initially praised the deal on January 16, telling reporters at the White House, “That’s what he should be doing. It’s a good thing for him to sign a trade deal. If you can get a deal with China, you should do that,” as reported by CNBC. But tensions escalated after Carney’s Davos speech on January 20, where he decried great powers using “tariffs as leverage, financial infrastructure as coercion,” widely seen as a jab at Trump, according to The New York Times.

Canada-U.S. trade minister Dominic LeBlanc reinforced Carney’s stance, stating, “There is no pursuit of a free trade deal with China. What was achieved was resolution on several important tariff issues,” per CBC News. Trump responded by rescinding Carney’s invitation to his “Board of Peace” and mocking Canada as dependent: “Canada lives because of the United States.”

USMCA Renegotiation Looms Large

The USMCA, shielding most Canadian exports from tariffs, faces mandatory review this summer. Article 32.10 requires three months’ notice for talks with non-market economies like China. Canada notified the U.S. before the EV deal, but Trump’s threat bypasses this framework, raising questions about enforcement. In August 2025, Trump hiked tariffs on select Canadian goods like steel to 35% from 25%, per CNBC.

Canadian industry leaders warn of catastrophe. The Canadian Chamber of Commerce noted the China pact benefits domestic consumers, not U.S. circumvention, as per Reuters. Provincial leaders rallied: Manitoba’s Wab Kinew declared Canada won’t be taken over “Not by China. Not by Trump,” while B.C.’s David Eby backed Carney on X, echoing sentiments from CBC.

Trump’s pattern includes past threats, like a 10% hike over an Ontario ad, which fizzled. Yet executives like Conference Board of Canada’s Pedro Antunes highlight recessionary consumer confidence, with U.S. uncertainty stifling investment, as in Toronto Star.

Broader Geopolitical Maneuvers

Carney positions Canada among middle powers resisting coercion, stating at Davos, “Middle powers must act together because if you are not at the table, you are on the menu,” via AP News. Trump has toyed with Canada as the 51st state, shared altered maps, and pursued Greenland aggressively, walking back EU tariffs after NATO talks.

On X, users like @MarcNixon24 warned a 100% tariff risks 75% of Canadian exports, while @govt_corrupt clipped Carney vowing forceful counter-tariffs. Carney appointed Mark Wiseman as Washington ambassador to navigate ties, per AP News.

Formal USMCA talks launch mid-January, with auto rules-of-origin central. Canadian Vehicle Manufacturers stress U.S. access viability, amplified by Trump. As Carney eyes diversification—Europe tops his list per Politico—Trump’s threats test North American resilience amid global realignments.

Stakeholder Reactions and Economic Stakes

Saskatchewan Premier Scott Moe decried tariff erosion of fair trade, per CBC. U.S. firms eye shifts; Trump posted businesses fleeing Canada for America. China moves fast, importing Canadian canola post-deal, Toronto Star noted. Carney urges buying Canadian, signaling domestic fortification.

Analysts see Carney’s pragmatism risking China ties but shielding from U.S. volatility. With 75% exports U.S.-bound in a C$1.3 trillion flow, a full tariff war could devastate autos, metals, machinery. Yet Carney’s Davos defiance and Beijing outreach mark a pivot from U.S. reliance, forcing industry insiders to recalibrate supply chains.