Eric Ham: Reality check on Trump’s threat of 100% tariffs on Canada

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Eric Ham is based in Washington, D.C. and is a political analyst for CTV News. He’s a bestselling author and former congressional staffer in the U.S. Congress and writes for CTVNews.ca.

Threatening Canada with 100 per cent tariffs, U.S. President Donald Trump is reverting to an overused policy tool to menace and disrupt one of America’s largest trading partners.

Doubling down on his recent jabs at Canada, he said, “Canada is systematically destroying itself” and called “the China deal” a “disaster.” It’s unclear what precipitated this latest round of criticisms. However, it’s unlikely the threat will carry the same sting this time around.

It’s important to note, 80 per cent of the goods that enter the U.S. through Canada are in fact protected under the Canada-United States-Mexico Agreement (CUSMA). Moreover, many expect a pending U.S. Supreme Court ruling will declare the White House tariff authority unconstitutional.

Such a transformative decision will only further undermine the president’s trade powers, making this latest attack meaningless and impotent.

Trade backbone under constant assault

CUSMA is the largest free trade region in the world. It has helped raise the standard of living for the people of all three member countries. The agreement has been widely described as the backbone of North America’s competitiveness. Yet, the trade pact is under constant assault by the White House.

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Also, time is finally running out on the president’s weaponized trade authority, which has stifled the regional economy since his return to office. Trump’s unhinged tirades aimed squarely at Canada continue to cast a pall over its markets, industries, and workers. These blistering skirmishes are happening even as CUSMA has been a boon for the region over the past five years.

In fact, since CUSMA went into effect, intra-regional trade in goods and services has grown by 37 per cent, driven largely by growth in industrial supplies and the automotive sector. In 2024, for the second consecutive year, Mexico was the top U.S. trading partner, reaching nearly US$930 billion in total trade. Canada followed closely at US$903 billion. Both were well ahead of U.S.-China trade flows.

The agreement also helped spur a 16 per cent rise in foreign direct investment (FDI) across the region, according to data from the United Nations Conference on Trade and Development (UNCTAD). The same data shows the United States remained the top global destination for FDI, attracting US$278 billion in 2024. Canada rose to sixth place at US$64 billion, up from tenth in 2019.

The region has benefited mightily from the trade deal, and its continued and sustained growth only fortified each nation collectively and independently.

However, according to a report from Washington-based think tank Center for Strategic and International Studies, Trump’s decision to enact crippling tariffs have only “weakened investor confidence, jeopardized the region’s hard-won gains, and risk eroding North American competitiveness at a critical moment.”

Leverage ahead of CUSMA negotiations

Throughout 2025, President Trump followed through on many of his threats, issuing import duties on a range of Canadian products including aluminum, steel, and copper.

Refusing to stand idle as its economy was under attack, the prime minister criss-crossed the globe pitching Canada’s stability, enormous energy reserves, critical earth minerals, and geostrategic location as key selling points to would-be partners.

After notching wins including a breakthrough deal with Beijing, Mark Carney and his negotiating team are walking into upcoming CUSMA negotiations with tremendous leverage and clout. Armed with an ample and robust trade agreement, newly established bilateral ties, and a renewed focus internally, Ottawa is prepared to weather the onslaught from Washington.

Still, considering the intensity and rapidity of the latest threats from the president, negotiators are in for a maddening ordeal even if Trump’s only real leverage at this point is the exit.

Threats and barbs losing their sting

In response to hardline rhetoric emanating from the White House, Mexico’s President Claudia Sheinbaum opted for diplomacy over confrontation. Canada, however, has responded with a sharper tone.

Carney declared, “Our old relationship with the United States, a relationship based on steadily increased integration, is over.” Eschewing retaliatory measures, Ottawa is confronting the truculence from the White House with resolute firmness, projecting measured calmness and downplaying the offences as a negotiating ploy. The prime minister is wise to stake out such a position. Just a week ago the president backed down from his efforts to force a takeover of Greenland.

A united effort by Europe countered the threat with its own economic offensive. More hardships were reportedly placed on the table including the shuttering of American military bases and even retreating from future FDI. Once again, TACO Trump reared its head and the American president, fresh off a takeover of Venezuela, ran up against a continent that, with the help of Canada’s PM, found its resolve. Now, where there was once trepidation, there is resolve. Where Trump’s scorn once evoked trembling, there is now ambivalence. Where Trump’s growing belittling sparked alarm, now Canadian leaders express exasperation.

America’s metamorphosis into tyranny might be occurring in real time domestically. However, the strongman threats and barbs have finally lost their sting abroad. Outwitted, outmanoeuvred and outplayed, Canada’s “middle-power” standing has forced Ottawa to deftly end its reliance on its biggest trading partner.

The prime minister parlayed seasoned economic strategy and shrewd diplomacy to sell Canada’s strengths, and is now prepared to leverage newfound gains into a lasting pathway forged under relentless and unyielding pressure.

Read more from Eric Ham:

• As Trump rages, Carney can’t keep having it both ways
• Trump says the Canada-China deal is ‘good’ — but his advisors aren’t so sure
• Why Trump’s Venezuela invasion spells doom for Canada’s trade deal
• Canada beware, Trump’s Venezuela invasion is a clear warning shot