US threatens Canada with 100% tariffs over trade deal with China

U.S. Treasury Secretary Scott Bessent warned Sunday that the United States will impose 100% tariffs on all Canadian imports if Ottawa finalizes a new trade agreement with China.

The warning follows a similar ultimatum issued by President Donald Trump a day earlier. Speaking on ABC, Bessent stated that Washington will not allow Canada to become a "backdoor" for China to funnel cheap goods into the U.S. market.

The friction comes after Canadian Prime Minister Mark Carney announced a "new strategic partnership" and a preliminary trade deal with Beijing on Jan. 16. Under that agreement, China would slash tariffs on Canadian rapeseed from 84% to approximately 15% starting March 1.

Beijing also plans to allow visa-free entry for Canadian travelers. In exchange, Canada would import 49,000 Chinese electric vehicles at a preferential tariff rate of 6.1%.

Bessent confirmed the administration is prepared to follow through on the tariff threat, citing a "likelihood of 100% tariffs if they implement a free trade agreement." The dispute heightens tensions in an ongoing trade war between the U.S. and Canada.

President Trump also criticized the deal on Truth Social, writing that China is "completely taking over the once-great country of Canada."

"Sad to see it happening," Trump wrote.

The Trump administration’s sharp rebuke of a preliminary trade understanding between Canada and China underscores the hardening of the "America First" protectionist doctrine. Washington is increasingly signaling that it views any allied trade engagement with Beijing as a zero-sum game and a direct threat to U.S. economic security. Central to this friction is the fear that Canada could serve as a "back door" or transshipment hub, allowing Chinese goods to circumvent U.S. tariff barriers and flood the American market.

The threat of 100% tariffs serves as a tool of extreme leverage, illustrating a "maximum pressure" strategy that spares not even the closest of partners in the effort to blunt China’s economic expansion. This maneuver leaves U.S. allies in a precarious position, forced to weigh the immediate benefits of Chinese market access against the long-term necessity of maintaining stable, integrated trade relations with the United States.

For export-dependent nations like Vietnam, the escalating tensions serve as a high-stakes cautionary tale. As Hanoi navigates the increasingly narrow corridor between the world’s two largest economies, any strategic pivot toward Beijing—particularly in sensitive sectors such as electric vehicles (EVs) or high-tech manufacturing—will likely draw intense scrutiny from Washington. The risk of being designated a conduit for Chinese "dumping" or transshipment is a tangible threat to Vietnam’s own trade privileges.

Ultimately, the volatility and unpredictability of current U.S. trade policy are creating a fractured global business environment. To avoid becoming collateral damage in the U.S.-China rivalry, middle powers must now prioritize highly agile economic diplomacy and rigorous supply chain transparency.

Escalating trade tensions between the U.S. and Canada could trigger significant instability for Vietnamese-American small businesses, especially those reliant on cross-border trade. For entrepreneurs in hubs like Little Saigon, the imposition of new tariffs may lead to higher overhead for phở restaurants and supply chain disruptions within the nail salon industry. As the cost of imported goods rises, these trade barriers will likely squeeze profit margins, forcing local business owners to navigate an increasingly uncertain economic landscape.