Global Tech Tensions Explode! Canada Defies Trump on EV Tariffs, UK Demands AI Halt

Ottawa Ignites Trade War: Canada's Shock EV Deal Angers Trump

A firestorm has erupted in North American relations. Canada has openly defied strong warnings from the United States, striking a controversial deal with China on electric vehicle (EV) tariffs. This bold move has triggered immediate and furious threats from US President Donald Trump, signaling a dramatic escalation in global trade tensions. The fallout is set to impact economies and technological development worldwide.

Canada's Daring Dragon Dance

Canadian Prime Minister Mark Carney announced Sunday that his country has no intention of pursuing a full free trade deal with China. However, in a startling move, Canada significantly cut its 100% tariff on Chinese electric cars. This decision breaks directly with the US stance. In exchange, China has lowered import taxes on key Canadian products like canola oil, meal, pork, and seafood.

The new agreement introduces an initial annual cap of 49,000 Chinese EV exports to Canada at a reduced 6.1% tariff rate. This cap is slated to increase to approximately 70,000 vehicles over the next five years. This marks a significant change from pre-2024, when no such cap existed. Furthermore, China is expected to inject investment into the Canadian auto industry within three years.

Trump Unleashes "100% Tariff" Threat

President Trump's response was swift and scathing. He immediately threatened a 100% tariff on all Canadian goods entering the United States if Ottawa proceeds with any trade agreement with Beijing. Taking to his social media platform, Truth Social, Trump declared, "If Canada makes a deal with China, it will immediately be hit with a 100% tariff against all Canadian goods and products coming into the U.S.A.".

Trump notably referred to Prime Minister Carney as "governor," issuing a stark warning against Canada becoming a "drop off port" for Chinese products aimed at the American market. This aggressive posture underscores Washington's determination to prevent any perceived circumvention of its own trade policies against China.

Carney's Defiant Stance at Davos

Prime Minister Carney's actions follow his recent remarks at the World Economic Forum in Davos. There, he asserted that "Middle powers must act together because if you are not at the table, you are on the menu". Without directly naming Trump, Carney warned about "coercion by great powers," a statement widely seen as a veiled critique of US pressure. This public challenge to US policy has resonated globally, drawing both praise and criticism.

The Canadian Prime Minister's move highlights a growing global trend. Nations are navigating complex geopolitical landscapes, seeking to assert their sovereignty amidst pressures from larger economic powers. The trade implications extend beyond North America, affecting global supply chains and the burgeoning EV market.

Pentagon's Radical Shift: China No Longer Top Threat

In a separate but equally significant foreign policy shift, the US Pentagon's 2026 National Defense Strategy (NDS) has repositioned China. The NDS no longer views Beijing as the top security priority for the United States. This marks a dramatic break from a decade of foreign policy that identified China as the primary threat to US security and economic interests.

President Trump's administration is now prioritizing the Western Hemisphere, focusing on "homeland and Western Hemisphere" security as its primary concern. The strategy also calls for US allies, including South Korea, to "shoulder their fair share of the burden of our collective defense". This reorientation could reshape alliances and defense spending worldwide, impacting scientific and technological defense research.

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