Trump Threatens 100% Canada Tariffs; Carney’s ‘Davos Rebuke’ Sparks Trade War Fears

The Lede

President Donald Trump threatened to impose a 100% tariff on all Canadian goods Saturday, reversing his stance on Ottawa’s new trade pact with Beijing just days after praising it. The escalation follows Prime Minister Mark Carney’s address at the World Economic Forum in Davos, where he declared the U.S.-led global order ‘over’, a statement widely interpreted as a rejection of Trump’s protectionist agenda. Markets reacted swiftly to the geopolitical fracture, with Bitcoin holding firm at $88,000 as investors rotated into non-sovereign assets amidst the uncertainty.

The Receipt

Writing on Truth Social, Trump warned that if Carney intends to make Canada a “Drop Off Port” for Chinese goods entering the U.S., he is “sorely mistaken.” The rhetoric marked a sharp departure from his comments earlier this week, where he characterized the Canada-China arrangement as “good” and something Carney “should be doing.”

“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 USA.”, President Donald Trump (via Truth Social)

The Details

The dispute centers on a preliminary agreement struck last week in Beijing. Under the deal, Canada agreed to import 49,000 Chinese-made electric vehicles at reduced tariff rates in exchange for lowered duties on Canadian agricultural exports to China. The move was designed to diversify Canada’s trade portfolio but has now placed the USMCA alliance in jeopardy.

Institutional Context

The trigger for Trump’s reversal appears to be political rather than purely economic. In his Davos speech on Tuesday, Carney received a standing ovation for diagnosing a “rupture” in the international order, calling on middle powers to forge a “third path” independent of American hegemony. Analysts view Trump’s tariff threat not just as trade policy, but as a direct punitive response to Carney’s challenge on the world stage. The threat of 100% levies on a top U.S. trading partner signals a new phase of volatility, forcing capital allocators to stress-test their exposure to North American supply chains.