A sudden escalation in U.S.–Canada rhetoric this week saw President Donald Trump threaten on social media to impose a 100% tariff on Canadian goods if Ottawa signs deals with certain foreign partners. The remark, published on January 24, prompted an immediate political response in Canada: the country’s prime minister—referred to in Chinese reporting as "Kani"—released a prerecorded video urging Canadians to "buy domestic" and to focus on what the nation can control.
The Canadian leader’s message reiterated a policy line he set out at the World Economic Forum in Davos, where he warned smaller and medium-sized states against being coerced by great powers and called for closer coordination among like-minded countries. In his social media video, he framed the buy-local appeal as a defensive move in the face of external economic pressure, and he highlighted recent diplomatic outreach to China, Qatar and other partners as part of a broader push to diversify trade and attract investment.
The spat reflects deeper strains between Washington and Ottawa since Mr. Trump’s return to the White House. The Chinese dispatch that reported the episode recounted prior U.S. criticisms of Canada, including accusations of ingratitude for American military protection and public threats connected to a missile defense project. Trump’s latest tariff threat arrived against this backdrop and follows earlier U.S. tariff measures that had already dented bilateral commerce.
The economic stakes are tangible. The United States imports large volumes of Canadian oil—some 4 million barrels a day according to the Chinese piece—and is a key market for Canadian metals, fertilizers and automotive parts. Analysts and industry executives have warned that punitive levies on auto components would quickly unsettle North American production networks and hit U.S. factories as much as Canadian suppliers.
Statistics cited in the report paint a picture of real impact: Canadian exports to the U.S. fell after the previous round of tariffs, contributing to a 1.6% annualised GDP decline in the second quarter of 2025 and a 7.5% downturn in exports for that period. Ottawa has responded with policy aimed at "diversification and resilience," including a fiscal plan to double non-U.S. market exports over the next decade and to reduce dependence on a single trading partner.
Public sentiment in Canada has hardened. Polling referenced in the article shows record-high negative views of the United States and particularly low confidence in the U.S. president, with sizable shares of Canadians describing the United States as an "enemy or potential threat." That public mood gives Ottawa some political cover to adopt a firmer posture toward Washington and to promote domestic industry.
For global audiences, the episode is a reminder that U.S. trade policy under Trump remains an unpredictable instrument of statecraft. It also underlines how vulnerable integrated supply chains are to political risk: measures aimed at one country can boomerang into higher costs and disrupted production across borders. For Canada the immediate challenge is practical—protecting jobs, keeping energy and parts flowing—and strategic—rebalancing trade ties without burning bridges with its largest market.
How Ottawa navigates this will matter beyond bilateral relations. A Canadian turn toward diversified markets could accelerate shifts in trade patterns, investment decisions and geopolitical alignments, particularly if it includes deeper economic engagement with China and other non-U.S. partners. For investors and policymakers watching North America’s industrial base, the incident sharpens a familiar question: how to make supply chains resilient in an era when trade policy can be wielded as a geopolitical weapon.