Trump threatens 100% tariff on Canada if it reaches trade deal with China

US President Donald Trump has threatened Canada with a 100% tariff on all exports to the US if the country reaches a trade deal with China.

Canadian Prime Minister Mark Carney recently visited Beijing, where he announced a strategic partnership between the two countries. The agreement would reduce tariffs for certain sectors, such as Chinese electric vehicles entering the Canadian market and Canadian canola oil sent to China.

Canada also set a goal of a 50% increase in exports to China by 2030.

"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 Jan. 24 on his social media platform Truth Social. "China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life."

Canada already faces a 35% tariff on exports to the US and a 10% tariff on certain energy products, but products that comply with the US-Canada-Mexico Agreement, including natural gas and most metals, are exempt.

The Department of the Treasury and the White House did not immediately respond to a request for comment from Platts, part of S&P Global Energy, on whether the additional 100% tariff would still allow for USMCA exemptions.

The USMCA is scheduled to be renegotiated this summer.

Canada pays 50% tariffs on steel, aluminum and copper, as well as 25% on automobile parts as part of the universal duties Trump imposed on all countries selling those products into the US.

Trump's tariff threat against the largest US trading partner comes after he dropped a tariff hike on eight EU countries in retaliation for opposing his efforts to acquire Greenland.

"The last thing the world needs is to have China take over Canada. It's NOT going to happen, or even come close to happening!" Trump wrote on Truth Social.

The Midwest premium broke the $1/lb barrier on Jan. 23. Platts last assessed the spot 99.7% P1020 US Aluminum Transaction Premium at $1.0095/lb plus London Metal Exchange cash, delivered Midwest, net 30-day payment terms. The price jumped fourfold in 2025.

Canada supplies about two-thirds of all primary aluminum consumed by the US, according to the Aluminum Association, which represents US aluminum producers and manufacturers. Ratcheting up the tariff would drive the price even higher.

Canada is also a key supplier of steel, lithium, natural gas, timber and other commodities.

The country supplied 6.6 million net tons of steel to the US in 2024, according to the American Iron and Steel Institute.

The US is also a net gas importer from Canada, although flows switch regularly on the East Coast. On a gross level, the US imported a total of 8.5 billion cubic feet/day from Canada in 2024 and exported 2.7 Bcf/d, according to data from the US Energy Information Administration.

Net gas flows from Canada to the US have averaged 6.3 Bcf/d so far this year, equivalent to about 5% of total US gas demand and one-third of total Canadian gas production, S&P Global Energy data showed.