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Fortune
Fortune
Eleanor Pringle

Trump's latest Canada meltdown dismissed by markets as another TACO trade—or at least unlikely 'post Heated Rivalry'

(L-R) Canada's Prime Minister Mark Carney and US President Donald Trump attend the draw for the 2026 FIFA Football World Cup taking place in the US, Canada and Mexico, at the Kennedy Center, in Washington, DC, on December 5, 2025. (Credit: Brendan SMIALOWSKI / AFP - Getty Images)

A year ago, if the Oval Office had threatened to axe a major piece of infrastructure shared with Canada, markets would have been in disarray. But it’s February 2026, and investors barely batted an eye.

Overnight, President Trump made a series of threats against the Canadian government, including blocking the Gordie Howe International Bridge, which connects the state of Michigan with the Canadian province of Ontario and was expected to open this year.

The reason for the furore appears to be Canada’s plans to trade more closely with China, a key economic rival of the U.S. President Trump said the neighbouring nation had “treated the United States very unfairly for decades”—a rhetoric now familiar to foreign governments, particularly since the Liberation Day tariffs announced in April 2025.

Writing on Truth Social, President Trump said that China “will eat Canada alive” if its trade links increase, and America will “just get the leftovers.”

Trump said the bridge will not be allowed to open “until the United States is fully compensated for everything we have given them, and also, importantly, Canada treats the United States with the fairness and respect that we deserve.”

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