It wasn’t just large swaths of the country getting snowed in this weekend — the relationship between Ottawa and the White House also went back into deep freeze.
What happened: Donald Trump threatened to impose 100% tariffs on “all Canadian goods and products” if “Canada makes a deal with China,” and later suggested he would stop a Chinese “takeover” of Canada. Trump also referred to Mark Carney as “governor” for the first time, hauling that old chestnut out of storage.
What constitutes a “deal” is not clear, but Canada’s minister responsible for U.S. trade tried to cast the recent agreement with China as a “resolution” and denied that the government was pursuing a broader free trade pact.
For Trump, it’s a sharp reversal from his initial reaction that “it’s a good thing for [Carney] to sign a trade deal” with China.
Elsewhere: U.S. Treasury Secretary Scott Bessent blasted Carney over the China agreement, saying, “We can’t let Canada become an opening that the Chinese pour their cheap goods into the U.S.”
Bessent also suggested Albertans wanted to secede from Canada, and that the province could one day join the U.S.
Why it matters: Canada is back in the crosshairs of the Trump administration, and the escalation over the weekend is a preview of what’s to come as CUSMA comes up for renegotiation.
Our take: Unfortunately, the threat of ripping up CUSMA — which has so far kept most of our exports to the U.S. tariff-free — gives the Americans enormous leverage over Canada. Preserving that deal with a volatile administration in the White House while also expanding trade with other large economies, like China’s, will be a dangerous high-wire balancing act.—TS