United States Threatens New Tariffs On Canada Due To Agreement With China

As Connecting the Dots reported last week, Canadian Prime Minister Mark Carney forged a preliminary agreement with Chinese officials that would, among other things, extend through 2026 its previous remission measures for certain Chinese steel and aluminum products that are in short supply in Canada. In reaction to the news, on January 24, U.S. President Donald Trump threatened to impose 100 percent tariffs on U.S. imports of Canadian goods if Prime Minister Carney goes ahead with the deal. The president said the penalties would apply to “all Canadian goods and products.”

As The Hill noted, President Trump’s comments came less than a week after he offered support for the Canada-China pact. “That’s OK. That’s what [Prime Minister Carney] should be doing,” President Trump had said. “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.”

Trump administration officials have pointed out that, under the United States, Mexico, Canada Agreement (USMCA), these countries cannot pursue trade agreements with non-market economy countries.

Prime Minister Carney responded over the weekend. According to Reuters, the prime minister said he respects Canada’s commitments and engagements under the USMCA, characterizing the pact with China not as a formal trade agreement, but as merely a means to “rectify some issues that had developed over last couple of years.” On social media, Canadian Finance Minister Dominic LeBlanc also weighed in, saying, “There is no pursuit of a free trade agreement with China. What has been achieved is a resolution on several important tariff issues.”