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Mark Carney’s suggestion comes just days after Donald Trump threatened to impose 100 per cent tariffs on Canada if it strikes a trade deal with China.
In a post on Truth Social on Saturday, the US president accused the Canadian Prime Minister of trying to make Canada a “drop off port” for Chinese goods. Trump threatened to start a trade war again after months of tension.
After Carney met Xi Jinping in Beijing last week, Canada and China agreed to remove trade barriers on electric vehicles and canola, partly designed to help Ottawa diversify its trade relationship.
Trump initially encouraged Carney to improve economic relations with China, saying: “If you can make a deal with China, you should do that.” However, on Saturday he adopted a new tone in his post on Truth Social.
“If Governor Carney thinks he’s going to make Canada a drop-off port for China to ship goods and products to the United States, he is sorely mistaken,” Trump wrote, using a headline used to lash out at Canadian leaders.
“If Canada reaches a deal with China, it will immediately impose 100 per cent tariffs on all Canadian goods and products.”
In response, Dominic LeBlanc, the Canadian minister responsible for Canada–US trade, said on Twitter that “there is no goal of a free trade agreement with China”.
“What was achieved was resolution on several important tariff issues,” he wrote. “Canada and the United States have built a remarkable partnership across our economy and security – and we will be focused on ensuring that the future of that relationship benefits workers and businesses on both sides of our border.”
Trump’s threats come after a tumultuous week in which he warned he would impose heavy tariffs on European countries over Greenland before backing down.
This reversal follows a pattern that ran throughout the first year of his presidency, in which he threatened punitive tariffs — often while financial markets were closed — before imposing significant exemptions, suspensions or withdrawing altogether.
Early in his tenure, he warned that large tariffs would be imposed on Canada and Mexico before offering exemptions that would allow most businesses to avoid the tariffs.
The new threat comes four months after Trump met Xi in South Korea and negotiated a ceasefire in the US-China trade war. He is expected to visit China in April and is hoping to reach another trade deal with the Chinese leader.
This also follows tensions between Trump and Carney in Davos. The Canadian leader won praise for a speech that argued that the rules-based international order was undergoing a “breakdown”. Carney did not mention Trump by name, but the speech was widely seen as a rebuke of the US president’s erratic behavior, including seeking to buy Greenland from NATO ally Denmark.
Trump hit back at the World Economic Forum, saying, “Canada wins because of the United States of America. Mark, remember this the next time you make a statement.”
Breaking with the US, which has de facto blocked imports of Chinese electric vehicles using tariffs, Canada agreed to accept imports of 49,000 Chinese electric cars with tariffs reduced from 100 per cent to 6.1 per cent.
The decision could impact trade negotiations between the US and Canada as part of the review of the 2020 USMCA trade agreement, which also includes Mexico. The US is concerned that Chinese companies are using Mexico as a base to export to the US to gain lower tariffs.
Carney, the first Canadian prime minister to visit Beijing in nearly a decade, is approaching the world’s second-largest economy as part of an effort to double exports to non-U.S. partners over the next decade.
Other US officials criticized Canada in Davos. Commerce Secretary Howard Lutnick said Canada should not engage with China, while Treasury Secretary Scott Besant called for an Alberta referendum to secede from Canada.
“Albertans are very independent people,” Besant said. “There are rumors there may be a referendum on whether they want to stay in Canada or not,” he said. “People want sovereignty. They want what America has got.”
“There are some lines being crossed here,” said Goldie Haider, president of the Business Council of Canada. “We need our leaders to defuse this situation.”
