Business & Economics
Trump Threatens 100 % Tariffs After Carney-Xi EV Tariff Swap
On 25 Jan 2026 Canada slashed its 100 % duty on up to 49,000 Chinese electric vehicles to 6 %, triggering U.S. President Donald Trump to warn he will hit all Canadian imports with a 100 % tariff if Ottawa edges toward broader trade with Beijing.
Focusing Facts
- Carney-Xi accord: Chinese EVs capped at 49,000 units a year will enter Canada at a 6.1 % MFN rate, down from a 100 % surtax imposed in 2024.
- Trump’s 25 Jan 2026 Truth Social post threatened 100 % tariffs on every Canadian good should Canada pursue any free-trade pact with China.
- US-Mexico-Canada Agreement comes up for mandatory review/renegotiation in summer 2026, giving Washington immediate leverage to act on the threat.
Context
This spat rhymes with the 1930–33 Smoot-Hawley cascade, when U.S. tariff hikes provoked counter-alignments and Ottawa sought Commonwealth preference at the 1932 Ottawa Conference. Then—as now—mid-sized economies looked for alternative markets when Washington turned protectionist. The Carney-Xi mini-deal exposes two structural trends: (1) the weaponisation of deeply integrated North American supply chains—autos cross the border up to six times—so even a limited tariff tweak reverberates; and (2) the tightening U.S. use of treaty clauses (USMCA Art. 32.10) to fence partners off from China, mirroring how the 1983 Caribbean Basin Initiative conditioned access on alignment with U.S. geopolitical aims. Whether this moment matters a century from now will depend on whether it accelerates the fracturing of the post-1994 NAFTA production platform; if Canada decisively pivots east, it could mark the beginning of a long realignment akin to Britain’s 1973 entry into the EEC, reshaping continental trade architecture for decades. Conversely, if Trump’s threat proves another bluff—he has reversed several since 2025—the episode may register as just another punctuation mark in the gradual drift toward a more regionalised, tariff-fragmented world economy.
Perspectives
Right-leaning US media
e.g., New York Post, Washington Examiner — Cast Carney’s cut in Chinese-EV tariffs as a dangerous about-face that invites Beijing to flood North America with cheap goods and therefore justifies Trump’s threat of 100 % retaliatory tariffs. Coverage echoes Trump officials almost verbatim and frames Canada as an ungrateful conduit for China, a narrative that energises the outlets’ America-first audience while skirting what Canadian consumers or exporters might gain.
Canadian and mainstream international outlets
e.g., AP copy in The Baltimore Sun, Newsweek — Highlight Carney’s insistence that Ottawa is merely resolving specific disputes and remains bound by CUSMA, portraying Trump’s tariff threats and annexation jokes as heavy-handed overreach. Reporting leans on Canadian government statements and stresses diplomatic restraint, which can underplay how the reduced EV tariff still offers China a new pathway into North American supply chains.
Business and financial press
e.g., The Business Times, Cryptopolitan — Treat the tariff swap as a significant policy reversal that could complicate looming USMCA talks and spark fresh penalties, focusing on the practical risks for integrated auto and rapeseed supply chains. Market-centred framing spotlights potential shocks for investors and trade negotiators, sometimes lapsing into breathless ‘about-face’ language that amplifies uncertainty to drive readership and clicks.