US President Trump has threatened to impose 100% tariffs on all Canadian exports if Canada becomes a transshipment point for Chinese goods entering the US. Canadian Prime Minister Carney responded that Canada has no intention of signing a free trade agreement with China.

This move is seen as positioning ahead of the upcoming USMCA review later this year, during which the US is expected to pressure Canada for further concessions.

Canada’s economy is already under pressure from existing US tariffs of up to 50% on products such as steel, aluminum, and autos, though about 80% of its exports to the US still enter duty-free under USMCA terms.

The uncertainty from the USMCA talks has led businesses to cut investment and hiring, while raising public concerns over job security. Canada has clarified it only aims to resolve specific trade disputes with China, not pursue a broader trade deal.

Overall, Trump’s threat adds to trade tensions in North America, challenging Canada in balancing its economic ties with the US and China.