Trump announces new tariffs on allies, pushing them toward trade deals with China

President Donald Trump has announced a series of new and increased tariffs, targeting U.S. allies like Canada and South Korea. He has threatened 100% tariffs on Canadian goods over a potential trade deal between Canada and China, and raised tariffs on South Korean imports to 25%.

In response, several allies are moving to diversify their trade relationships. Canada, led by Prime Minister Carney, has broken with the U.S. to strike a deal with China, agreeing to cut tariffs on some Chinese electric vehicles. Other countries are also reportedly looking to China for new trade deals as a result of the uncertainty created by U.S. policy.

Despite the tariffs aimed at it, China's trade position has remained strong. It announced a record $1.2 trillion trade surplus for 2025. A new point of tension emerged as Trump also announced 25% tariffs on any country that does business with Iran, a move China has denounced and threatened to retaliate against.