Days after calling a potential Canada-China trade deal a good thing, President Donald Trump signaled an apparent change of heart, announcing he would impose a 100% tariff on Canadian goods if the two nations follow through with the agreement.
In a Truth Social post Saturday, Trump suggested Canada would become a “drop-off port” for Chinese goods entering the United States. He referred to Canadian Prime Minister Mark Carney as “Governor Carney,” indicating he has not fully given up on his pursuit of making Canada America’s 51st state.
“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,” Trump wrote. “China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric and general way of life. 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.”
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Carney and Chinese President Xi Jinping reached a deal about a week ago. Under the agreement, Canada would allow China to export 49,000 electric vehicles at a “favored nation” tariff rate of 6.9%. In exchange, China would lower its tariffs on Canadian canola oil, lobster, crab and peas through the end of the year. The Canadian government expects the agreement to generate $3 billion in revenue for the country’s agriculture and fishing industries.
The deal also includes a joint law enforcement agreement to combat narcotics trafficking, cybercrime, synthetic drugs and money laundering. China also committed to allowing Canadians to travel to China without a visa.
After the deal was announced, Trump appeared to give his approval.
“Well, that’s OK, that’s what you should be doing. I mean, it’s a good thing for him to sign a trade deal. If you can get a deal with China, you should do that, right?” Trump said Jan. 15.
But in the days following, members of the Trump administration expressed reservations about the agreement.
U.S. Commerce Secretary Howard Lutnick said this week the China-Canada trade agreement could complicate renegotiations of the trilateral trade pact among the United States, Mexico and Canada.
According to Federal Reserve data, China has had the highest effective tariff rate increase since Trump’s second term began one year ago. The effective tariff rate on Chinese goods entering the U.S. is now 37 percent, up from 10.9 percent at the end of the Biden administration.
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The tariff rate on Canadian goods was 0.1 percent prior to Trump’s administration; it now stands at 3.9 percent.
Since Trump took office, trade with both nations has declined, the data show.
