US President Donald Trump has threatened to slap a 100% tariff on Canadian goods if the country strikes a trade deal with China. 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 U.S.A., Trump said on Truth Social. It is unclear what deal Trump is referring to in his social media post. Last week, Canada's Prime Minister Carney announced a strategic partnership with China, agreeing to reduce tariffs. At the time, Trump called the move a good thing. However, tensions have escalated recently, particularly after Carney's comment at Davos about the rupture of the US-led world order.

Carney also urged other middle powers to stand together in the face of economic coercion from greater powers but did not mention Trump directly. The next day, Trump stated: Canada lives because of the United States.

Trump's tweet suggested that he would not tolerate Canada acting as a conduit for Chinese goods into the US market. Meanwhile, Canada's US trade minister Dominic LeBlanc clarified that Canada is not seeking a free trade deal with China but has resolved several important tariff issues.

This development has come amid Canada's efforts to diversify trade relationships beyond the US, especially in light of Trump's inconsistent tariff policies. Under the recent agreement with China, tariffs on Canadian canola oil will drop significantly, while Canada will tax Chinese electric vehicles at a much lower rate than before. Carney expressed optimism about Canada's role in the evolving global trade landscape.