MASSIVE Trade War Brewing: US vs. Canada & China

A potential 100% tariff on Canadian goods looms, as Trump warns of China’s influence, signaling a possible trade war escalation.

Story Highlights

US Treasury Secretary Scott Bessent warns of 100% tariffs if Canada finalizes a trade deal with China.
Trump claims China’s influence over Canada is increasing, sparking national security concerns.
Canada’s deal with China includes reduced tariffs on canola and importing Chinese electric vehicles.
The tensions highlight ongoing US-Canada trade disputes and fears of Chinese goods entering the US market via Canada.

US Threatens Tariffs Over Canada-China Deal

On January 25, 2026, US Treasury Secretary Scott Bessent announced the possibility of imposing 100% tariffs on Canadian imports if Canada proceeds with a new trade agreement with China. The deal, announced by Canadian Prime Minister Mark Carney during his visit to Beijing, aims to reduce Chinese tariffs on Canadian canola and allow visa-free travel for Canadians. The agreement also involves Canada importing 49,000 Chinese electric vehicles at preferential tariffs, raising concerns about Chinese goods entering the US market through Canada.

President Donald Trump expressed his discontent on Truth Social, warning that “China is successfully and completely taking over the once Great Country of Canada.” This statement underscores the administration’s fears of a backdoor for Chinese goods to evade US tariffs. The US sees the move as a national security and economic threat, potentially exacerbating existing trade tensions between the US and Canada.

ABC News’ Jonathan Karl: “[Trump] said, if Canada makes a deal with China, it will immediately be hit with a 100% tariffs against all Canadian goods. Why is Donald Trump threatening Canada again with another trade war?”

Treasury Secretary Scott Bessent: “We can't let Canada… pic.twitter.com/LcZEXGzNT1

— RedWave Press (@RedWave_Press) January 25, 2026

Historical Context and Trade Tensions

Canada-China relations have been strained since 2018 when Huawei CFO Meng Wanzhou was arrested in Vancouver at the US’s request. This arrest led to Chinese retaliation, including significant tariffs on Canadian canola. Relations have thawed under Carney’s leadership, culminating in the January 16 deal. Meanwhile, US-Canada trade tensions have persisted, stemming from Trump’s initial term tariffs on steel and aluminum, now revived amid broader US-China decoupling efforts.

The deal positions Canada as a potential transshipment point for Chinese goods, prompting a strong US response. The ongoing USMCA includes anti-China provisions to prevent such backdoor trade, reflecting long-standing concerns about Chinese influence in North America.

Impact on US-Canada Relations and Global Trade

The announcement of potential tariffs could lead to a significant trade war, delaying the Canada-China deal and impacting North American markets. In the short term, Canadian canola farmers stand to benefit from reduced tariffs, while the influx of Chinese electric vehicles could challenge the US auto industry. Long-term implications include strained US-Canada relations under the USMCA and accelerated global supply chain shifts.

The broader industry effects include potential threats to North American production, particularly in the electric vehicle sector. The agricultural sector in Canada may see relief, but the potential for trade blockades raises concerns about regional economic stability. Both the US and Canada must navigate these challenges carefully to maintain economic and political balance in the region.