FX.co ★ Trump Threatens 100% Tariffs on Canada

U.S. President Donald Trump issued a warning to Canada about imposing 100% tariffs on all Canadian exports to the U.S. if Canada continues with plans to engage in a trade agreement with China, according to Bloomberg. Trump criticized the Canadian leader, describing his decision to expand business ties with China—including a recent agreement permitting more Chinese electric vehicle imports—as a grave error. Last week, Canada and China made strides by agreeing to reduce certain trade barriers and improve diplomatic relations, signaling a shift in Canada's foreign policy away from Trump's trade strategies. Canadian Prime Minister Mark Carney anticipates that China will lower tariffs on Canadian rapeseed, commonly known as canola, following discussions with Chinese President Xi Jinping on January 16. This marked the first Canadian leader's trip to Beijing in nearly a decade. In exchange, Canada will allow 49,000 Chinese electric vehicles into the Canadian market at a reduced tariff rate of approximately 6%, thus eliminating a previous 100% surtax. The steep tariff on Chinese electric vehicles was originally instituted by Canada in 2024 to mirror U.S. trade policies.