President Donald Trump has issued a staggering ultimatum to Canada, threatening to impose 100% tariffs on all Canadian imports if Ottawa proceeds with a rumoured strategic trade and investment agreement with China.
The threat, delivered via a series of social media posts early today, Sunday, 25 January 2026, has sent a chill through North American markets and represents the most severe escalation in US-Canada trade relations since the USMCA was signed.
Trump’s frustration appears to stem from reports that Canada is exploring a “New Silk Road” style partnership with Beijing to boost its mining and tech sectors—sectors that the US considers vital to North American national security.
“Canada has a choice: They can be a great neighbor and partner to the United States, or they can join the Chinese Communist Party in their quest for global dominance. If Canada makes a deal with China, we will tax everything they send across our border at 100% immediately. No more games!”
A 100% tariff would effectively double the price of Canadian oil, automotive parts, lumber, and dairy products entering the US, potentially collapsing integrated supply chains.
Trump claims the Canada-China deal would create a “backdoor” for Chinese components to bypass US tariffs by being assembled in Canada.
Prime Minister Justin Trudeau’s administration has characterized the reports of a secret deal with China as “mischaracterized,” while defending Canada’s right to diversify its trading partners.
Canadian officials stated that while the US remains their closest ally, Canada must seek new markets to protect its economy from the “unpredictability” of Washington’s trade policies.
The Canadian Dollar (Loonie) dropped 1.2% against the greenback within hours of the post, as traders weighed the possibility of a total trade freeze.
Economists warn that a 100% tariff would hurt the US auto industry just as much as Canada’s, given how many times a single car part crosses the border during production.
