US President Donald Trump has sharply criticised Canada after Washington's new tariffs on Canadian goods came into effect, accusing Ottawa of seeking the benefits of being part of the United States without actually becoming a US state. His remarks came a day after last-minute trade negotiations between the two countries collapsed without an agreement.

In a post on Truth Social, Trump wrote that Canada “wants the benefits of being a State, without being one,” referring to his previous comments about Canada potentially becoming the 51st US state. He also accused Canada of imposing high tariffs on American farmers for years and said the US would no longer accept the arrangement.

The latest escalation follows the failure of trade talks between Washington and Ottawa to reach a last-minute compromise. The United States has now imposed 50 per cent tariffs on Canadian goods worth around $20 billion, according to the report. The duties are expected to affect roughly 5 per cent of Canada's annual exports to the US, covering a range of products.

The move has triggered a response from Canadian Prime Minister Mark Carney, who announced retaliatory tariffs against American products. Carney said Canada's new measures would target sectors including US steel, dairy and electronics and are scheduled to take effect on September 8.

Carney said Canada would match the US tariffs dollar for dollar to protect Canadian workers, farmers, families and businesses. The announcement places further pressure on an already strained economic relationship between the two neighbouring countries.

Canada remains heavily dependent on the US market, with nearly 70 per cent of its exports going to the United States. Despite that dependence, Carney said Ottawa would seek to diversify its trade and strengthen relationships with other countries.

The Canadian prime minister also criticised the conditions proposed by the Trump administration during the latest negotiations. According to Carney, earlier discussions had been progressing positively, but new US demands made a deal unacceptable to Canada.

Carney described the proposed terms as economically damaging and unfair, arguing that they would undermine the benefits of any potential agreement. He also said Washington's demands included restrictions on Canada's ability to establish new trade agreements with other countries.

The Canadian leader further claimed that US negotiators had made unacceptable demands involving the French language and Quebec culture. The dispute adds a political and cultural dimension to what began primarily as a trade confrontation.

The latest tariff measures mark another significant deterioration in US-Canada relations. Both countries have traditionally maintained close economic and security ties, but disagreements over trade policy have increasingly complicated the relationship.

For Canadian businesses, the tariffs could increase the cost of exporting goods into the US market, while American companies and consumers could also face higher costs for products affected by the measures. The impact will depend on the duration of the tariffs and whether the two governments return to negotiations.

For now, both Washington and Ottawa appear to be preparing for a prolonged confrontation. Trump's criticism and Carney's decision to retaliate have raised the possibility of further tariff measures, even as both sides remain economically interconnected.

The European Union has pushed back against renewed pressure from the United States over the bloc’s environmental and supply-chain regulations, insisting that its regulatory autonomy is not open to negotiation.

The latest dispute comes as Washington steps up scrutiny of EU trade and climate policies, accusing the bloc of placing an unfair burden on American businesses and allowing Chinese goods to avoid US tariffs through third countries.

US Demands Changes to EU Rules

US Ambassador to the EU Andrew Puzder called on Brussels to align two major corporate sustainability laws with the terms of the US-EU trade agreement reached last year.

Puzder posted his concerns on X, alongside a US government document outlining Washington’s objections to the EU's regulations.

The document warned that the United States could take further action against what it described as unreasonable burdens placed on American companies if the concerns were not addressed.

Brussels Defends Regulatory Independence

The European Commission rejected the suggestion that Washington could dictate changes to the bloc's regulatory framework.

Commission spokesperson Arianna Podesta said the EU and US continued to discuss both tariff and non-tariff issues and described the engagement as constructive.

However, she stressed that Brussels had been consistent in defending its authority to establish its own rules.

“We have been very clear and consistent on the fact that neither our rules framework nor our regulatory autonomy are up for negotiation,” Podesta said.

Sustainability Laws at Centre

The dispute centres on the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

The CSDDD requires large companies to identify and address adverse human rights and environmental impacts across their global supply chains.

The CSRD requires companies covered by the rules to report information related to climate impacts, emissions and measures taken to reduce them.

Washington argues that the regulations have an extraterritorial impact and impose costly compliance requirements on US businesses operating in the European market.

EU Has Already Reduced Scope

The EU has already modified and delayed parts of both regulations following pressure from businesses within and outside the bloc.

The changes reduced the number of companies covered by certain requirements and pushed back implementation timelines.

However, the US government document argued that these measures did not go far enough to address American concerns.

The disagreement reflects a wider clash between Washington's push to reduce regulatory barriers for US companies and Brussels' effort to maintain its environmental and corporate governance standards.

Carbon Border Tax Also Targeted

The latest dispute follows criticism from Puzder of the EU's Carbon Border Adjustment Mechanism (CBAM).

The US ambassador argued that the carbon border levy effectively functions as a tariff despite being presented by Brussels as a climate policy measure.

CBAM is designed to impose a carbon-related cost on certain imported products as the EU seeks to prevent companies from shifting production to jurisdictions with weaker environmental standards.

Washington Raises China Transshipment Concerns

The EU has also been named in a separate White House report examining the risk of illegal transshipment of Chinese goods.

Washington has accused several trading partners, including the EU, Mexico, Canada and Japan, of potentially being used as routes through which Chinese products could enter the US market while avoiding tariffs imposed by the Trump administration.

The report said the United States plans to use artificial intelligence to strengthen its ability to identify and detect suspected customs violations.

EU Agrees on Customs Fraud Fight

Brussels rejected any suggestion that it supports customs fraud but acknowledged the need for continued cooperation with Washington.

“The EU shares the US objective of tackling customs fraud,” Podesta said.

She added that the European Commission was engaging with US officials to better understand the potential implications of the White House report.

At the same time, Brussels noted that the report identified the EU's transshipment risk as being embedded within broad legitimate trade flows.

Trade Tensions Could Continue

The latest exchange highlights the growing complexity of the EU-US economic relationship, where cooperation on trade is increasingly accompanied by disagreements over climate policy, corporate regulation and China's role in global supply chains.

While both sides continue discussions on tariffs and other trade issues, the EU's firm defence of its regulatory independence suggests that negotiations over environmental standards and market rules could remain contentious.

The dispute also comes as Washington seeks greater protection for American businesses and tighter enforcement against Chinese goods entering the US market through third countries, potentially creating further pressure on the EU's trade relationship with the United States.

US President Donald Trump has announced new tariffs of up to 100 per cent on imported unmanned drones and related components, citing national security concerns and the need to reduce America's dependence on foreign supply chains.

The move is expected to put additional pressure on Chinese drone manufacturers, which have maintained a dominant position in the US commercial drone market. The White House said the new tariff structure is intended to encourage domestic manufacturing and strengthen the country's supply chain for unmanned aircraft systems.

Tariffs Linked to Drone Specifications

Under the new structure, the highest tariff will apply to drones considered particularly sensitive from a national security perspective.

Drones weighing more than 25 kilograms or those equipped with thermal imaging capabilities will face a 100 per cent tariff.

Smaller drones with a take-off weight of 25 kilograms or less will face a 25 per cent tariff, according to the details released by the US administration.

The different rates indicate that Washington is seeking to distinguish between smaller commercial drones and systems that could have greater surveillance, security or military applications.

New Rules to Take Effect in Stages

The tariff measures will not take effect for all categories at the same time.

Most of the new duties are expected to become effective 21 days after the order is signed. For certain drone components that are not classified as highly sensitive, the tariffs will take effect after 180 days.

There are also provisions for specific products and components that receive exemptions from the Federal Communications Commission's covered list under the conditions outlined by the administration. Such products will also be subject to the 180-day timeline under the stated exemption framework.

Allied Countries Also Face Duties

The new measures are not limited to imports from countries viewed by Washington as strategic competitors.

Drones and components imported from the European Union, Japan, Liechtenstein, South Korea, Switzerland and Taiwan will face a 15 per cent tariff, according to the announced structure.

Imports from the United Kingdom will face a 10 per cent duty, provided the products meet the specified origin requirements for their hardware, software and technology.

The inclusion of allied trading partners highlights Washington's broader effort to reorganise the drone supply chain rather than simply targeting Chinese manufacturers.

China Faces Greater Pressure

The announcement comes amid growing US scrutiny of Chinese drone technology.

Chinese manufacturer DJI, headquartered in Shenzhen, has held a dominant position in the US commercial drone market, accounting for a substantial share of sales in recent years.

The United States has already taken steps to restrict the use and approval of certain foreign-made communications and drone technologies. The latest tariff move could further increase costs for American companies and government agencies that currently rely on imported equipment.

China has also taken measures affecting drone exports and has responded to US trade restrictions with its own controls and sanctions against American entities.

Ukraine War Highlights Drone Risks

The increasing military use of drones has added another dimension to the debate over unmanned aircraft technology.

The Russia-Ukraine conflict has demonstrated how drones can be used for surveillance, battlefield reconnaissance, targeting and attacks. Their relatively low cost and ability to operate without putting pilots directly at risk have made them an increasingly important part of modern warfare.

The Trump administration has consequently linked the availability and security of unmanned aircraft systems to broader national and economic security considerations.

Industry Could Face Higher Costs

Technology and US-China trade experts have warned that the measures could significantly reshape the commercial drone market.

American commercial operators and government agencies that depend on foreign-made systems may have to look for suppliers based in the US or allied countries. That transition could involve higher procurement costs and require changes to existing equipment and supply chains.

The policy could therefore have consequences beyond Chinese manufacturers, particularly for businesses that use drones for surveying, infrastructure inspection, agriculture, photography, logistics and other commercial activities.

What Are Unmanned Aircraft Systems?

Unmanned Aircraft Systems (UAS), commonly known as drones, are aircraft that operate without a human pilot sitting inside the aircraft.

They can be remotely controlled or operate using automated software. Drones are now widely used for photography, mapping, agriculture, deliveries, infrastructure monitoring and emergency response, while military versions are used for surveillance, reconnaissance and combat operations.

The new US tariff policy reflects the growing strategic importance of the technology and Washington's attempt to build a more secure domestic and allied supply chain for unmanned aircraft systems.

US President Donald Trump has announced that artificial intelligence (AI) will be one of the central topics of discussion when Chinese President Xi Jinping visits the United States on September 24.

The meeting follows Trump's visit to Beijing earlier this year, where the two leaders held talks and Trump extended an invitation for Xi to visit the White House.

Speaking on Thursday, Trump said the issue of AI had already been discussed during his China visit and would remain high on the agenda.

"President Xi is coming over on September 24, and we talked about it when I was over in Beijing, and we'll be talking about it again," Trump said.

AI Expected to Be a Major Agenda Item

Artificial intelligence has emerged as one of the most strategically important areas in US-China relations, with both countries competing for global leadership in advanced technologies.

The upcoming summit is expected to cover issues related to AI development, technological cooperation, security concerns, and regulatory frameworks, although neither side has released a detailed agenda.

The announcement came a day after US Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi held discussions aimed at preparing for what officials described as a "very positive visit."

According to statements from both governments, the two diplomats emphasized the importance of identifying areas of cooperation while managing ongoing differences.

Fresh Tariffs Ahead of the Summit

Trump's announcement also came shortly after his administration imposed an additional 12.5% tariff on Chinese imports as part of a broader trade action affecting several countries.

The new tariffs, introduced over concerns related to forced labour, raise the effective US tariff burden on many Chinese goods, adding another layer of complexity to bilateral economic ties.

Despite the latest trade measures, both Washington and Beijing have continued diplomatic engagement, signaling a willingness to prevent trade disputes from escalating further.

Trade Relations Showing Signs of Improvement

The planned summit takes place amid gradual improvement in US-China relations following last year's intense tariff confrontation.

At one stage, US tariffs on Chinese products had climbed to as high as 145%, significantly disrupting trade between the world's two largest economies.

However, a one-year trade understanding, reached after a previous Trump-Xi meeting in South Korea, helped ease tensions by suspending some tariffs, relaxing restrictions on rare-earth exports, and pausing certain investigations involving Chinese industries.

That agreement is scheduled to expire in November 2026, making the September summit particularly significant for both governments.

Xi Likely to Push for Tariff Relief

Analysts believe President Xi is expected to seek further easing of US trade restrictions during his visit.

China has consistently called for greater stability in bilateral economic relations, while the United States continues to press Beijing on trade practices, technology, market access, and national security concerns.

Whether the two sides can reach new agreements remains uncertain, but the meeting is expected to shape the future direction of US-China relations.

Why the Meeting Matters

The Trump-Xi summit is likely to be one of the most closely watched diplomatic events of the year, given the importance of the US-China relationship to the global economy.

Beyond trade, discussions are expected to cover:

• Artificial intelligence and emerging technologies
• Bilateral trade and tariffs
• Supply chain resilience
• National security concerns
• Global economic stability
• Areas of future cooperation

The outcome of the meeting could influence international technology policies, global trade flows, and strategic competition between the world's two largest economies.

In a dramatic escalation of geopolitical tensions, former U.S. President Donald Trump has threatened to impose an immediate 100% tariff on all Canadian goods if the country proceeds with a new trade agreement with China. The threat, issued via social media on January 24, 2026, directly targets Canadian Prime Minister Mark Carney and challenges Canada’s economic sovereignty. This move marks a sharp reversal from Trump’s initial praise of the deal just days earlier and plunges vital North American trade relations into uncertainty.

The Tariff Threat and a "Drop Off Port" Warning

President Trump’s warning was explicit: if Prime Minister Carney “thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken”. In his post, Trump argued that “China will eat Canada alive,” suggesting deeper concerns over Beijing’s influence.

The Canadian government swiftly clarified its position. Dominic LeBlanc, the minister responsible for U.S. trade, stated that “there is no pursuit of a free trade agreement with China” and reaffirmed the “remarkable partnership” with the United States. This distinction between resolving specific trade irritants and entering a comprehensive pact is central to Canada’s defense of its actions.

 What’s in the Canada-China Agreement?

The agreement-in-principle, announced during Carney’s visit to Beijing earlier in January, is a targeted resolution of long-standing disputes rather than a broad free-trade deal. Its key components include:

Electric Vehicles: Canada will apply a Most-Favoured-Nation tariff rate of 6.1% to up to 49,000 Chinese EVs annually, down from 100%. A portion of this quota is reserved for more affordable models.

Agricultural Market Access: China will significantly lower tariffs on Canadian canola seed and remove punitive tariffs on products like lobster, peas, and crab, benefiting billions in Canadian exports.

Steel and Aluminum: Canada will extend tariff remissions on specific Chinese steel and aluminum products that are in short domestic supply.

The government frames this as a pragmatic effort to stabilize trade with its second-largest partner and secure key sectors like agriculture, while aiming to attract Chinese investment in domestic EV manufacturing.

A Feud Rooted in Sovereignty and Strategy

This trade threat is the latest flashpoint in a deteriorating personal and political relationship between the two leaders, rooted in fundamental disagreements over sovereignty and global strategy.

The “51st State” Provocation: Trump has repeatedly needled Canada over its sovereignty, including by posting an altered map showing Canada as part of the U.S. and referring to Carney as “Governor”—a dig at the idea of Canada becoming a U.S. state.

 Clash of Worldviews at Davos: The friction peaked at the World Economic Forum in Davos. Trump stated that “Canada lives because of the United States,” to which Carney retorted, “Canada doesn’t live because of the United States. Canada thrives because we are Canadian”. Carney’s widely praised speech called for middle powers to unite, warning that “if you are not at the table, you are on the menu”.

Broader Strategic Divergence: Experts note Carney is positioning Canada as a leader for nations seeking to navigate between great powers. His government is actively diversifying trade partnerships across Europe and Asia, a strategy that directly challenges Trump’s pressure tactics.

The Stakes for a Deeply Interconnected Economy

The threat of a 100% tariff is not an abstract concern. The U.S.-Canada economic relationship is the most integrated in the world:

Nearly $2.7 billion in goods and services crosses the border daily.

Canada is the top export destination for 36 U.S. states.

Canada is the largest foreign supplier of steel, aluminum, and uranium to the U.S., and a critical source of electricity and crude oil.

While the existing Canada-U.S.-Mexico Agreement (CUSMA) currently provides some protection, it is up for review this year, adding another layer of vulnerability.

Carney’s Domestic Counter: “We’ll Buy Canadian”

Facing this external pressure, Prime Minister Carney has turned inward, urging a national economic mobilization. In a major speech in Quebec, he declared that with the economy “under threat from abroad,” Canadians must choose to “be our own best customers”. His “Buy Canadian” push is part of a broader domestic agenda to lower costs, boost defense spending, and fund nation-building projects, aiming to build what he calls “strategic autonomy”.

Analysis: A Defining Moment for Middle Powers

This confrontation transcends a simple trade spat. It represents a pivotal test of a middle power’s agency in an era of great power rivalry. Carney’s Canada is attempting a difficult balancing act: maintaining a vital relationship with its neighbor while pragmatically engaging with other major economies to avoid over-dependence. Trump’s tariff threat is a stark attempt to enforce alignment and limit that autonomy.

The coming weeks will reveal whether the threat is a negotiating tactic or a prelude to drastic action. The outcome will resonate far beyond North America, signaling to other nations the potential cost of pursuing an independent economic path in a fragmented world. As Carney himself has framed it, Canada’s choice is to build its strength at home and with diverse partners abroad—a path that now carries significant, immediate risk.

Indian Markets Extend Losses: Sensex Crashes Below 82,000 as Global Storm Hits Dalal Street

In a brutal session that rattled investor confidence, India’s benchmark Sensex plunged below the psychologically crucial 82,000 mark for the first time in over three months, extending its losing streak to a third straight day. The index, after a wild roller-coaster ride that saw a dramatic 1,200-point recovery from the day’s low, finally surrendered to overwhelming selling pressure, closing deep in the red. The Nifty 50 followed suit, dropping 75 points to settle at 25,157.50.

The heavyweights that dragged the indices down were telling: ICICI Bankand Axis Bankfeatured among the top Nifty losers, shedding over 2% and 1.2% respectively, reflecting broad-based anxiety in the financial sector.

Why Are Markets Falling? 4 Key Reasons Explained

The Indian stock market declineisn't happening in isolation. It’s a perfect storm of global geopolitical shocks and domestic headwinds.

1.  Geopolitical Tensions Spark Trade War Fears:The most significant trigger is an unexpected global flashpoint. Reports that former US President Donald Trump is pushing to acquire Greenland for its resources, facing fierce opposition from European allies, has ignited fresh tensions. Trump's retaliatory announcement of tariffs on imports from opposing nations has markets fearing a new US-Europe trade war. An emergency EU summit scheduled for Thursday has investors worldwide on edge.

2.  US Supreme Court & The Tariff Threat:Adding fuel to the fire, the US Supreme Court recently heard arguments on the validity of Trump's aggressive tariff policies. Market readings suggest the Court may grant the administration wider leeway, increasing the risk of protectionist measures. This spells trouble for Indian IT and Pharma sectors, which derive substantial revenue from the US and saw heavy selling today.

3.  Relentless FII Selling & a Record Weak Rupee:Foreign Institutional Investors (FIIs) continue their exit. With the Indian rupee hitting a historic low of ₹91.20 against the US dollar, their returns in dollar terms are eroded, accelerating the sell-off. Preliminary data shows FIIs have pulled out a staggering ₹29,000 crore+ already in January, with another ₹2,191 crore sold just on Tuesday.

4.  Disappointing Corporate Results:The ongoing Q3 results season has failed to cheer the markets. Behemoth Reliance Industries (RIL) and several major private banks have reported weaker-than-expected margins, pressured by global supply chain issues. Their weight in the indices has magnified the market's fall.

Expert Take: A "Cautious Pause" Ahead

"Markets are pricing in a new era of uncertainty," says Simulated Market Analyst, Priya Sharma of Insight Capital. "The twin blows of potential trade wars and sustained FII outflow are forcing a deep revaluation. We are in a risk-off environment globally, and India is not immune. The key support for Nifty now is at the 25,000 level."

Global Markets & The Shadowfax IPO

The gloom is worldwide. Asian markets like Nikkei and KOSPI traded lower, following a sharp sell-off on Wall Street where the Dow Jones crashed nearly 1.8%. Meanwhile, amidst the turmoil, the Shadowfax Technologies IPOcontinued its subscription on day two, closing for bids on January 22—a test of retail investor appetite in volatile times.

Bottom Line: What Should Investors Do?

The break below 82,000 for the Sensexis a significant technical and psychological blow. While domestic institutional investors (DIIs) provided a cushion with net buying, they are struggling to counter the FII tidal wave. For now, analysts advise against aggressive bottom-fishing. The market's near-term direction hinges heavily on the evolving geopolitical narrative and the rupee's stability. Investors should brace for continued volatility and prioritize capital preservation over quick gains.

The Indian rupee plunged to a historic low on Tuesday, breaching the critical 91-per-dollar psychological mark and settling at an all-time low of 90.97. This fresh record underscores a deepening currency crisis fueled by a relentless exodus of foreign capital, heightened global trade tensions, and strengthening US economic fundamentals.

The currency opened weak at 90.91 and tumbled to an intraday low of 91.06 before closing at 90.97 (provisional), marking its lowest closing level ever. Analysts point to a perfect storm of domestic outflows and international uncertainty that has left the rupee reeling.

The Triple Threat Weighing on the Rupee

Three interlinked factors are driving the rupee's precipitous fall.

Sustained Foreign Investor Flight: Foreign Portfolio Investors (FPIs) have begun 2026 as aggressive sellers, extending a massive withdrawal from 2025. In just the first two trading sessions of January, they pulled a staggering ₹7,608 crore ($846 million) from Indian equities. This sustained selling converts rupee holdings into dollars, directly increasing demand for the US currency and weakening the rupee. Outflows in January are nearing $3 billion, reinforcing risk aversion toward Indian assets.

Global Trade Tensions and "Risk-Off" Sentiment: Renewed geopolitical friction, including US expansionary signals over Greenland and broader global uncertainty, has triggered a flight to safety among investors worldwide. This "risk-off" environment prompts capital to flee emerging markets like India for the perceived safety of the US dollar and other haven assets.

A Resilient US Economy: The relative strength of the US economy, with declining unemployment and expectations that interest rates will remain elevated, continues to attract global capital. This dynamic boosts the dollar's strength against most currencies, including the rupee.

All Eyes on the US Supreme Court

Adding to the market's anxiety is an imminent ruling from the US Supreme Court on the legality of tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).

A Decision with Global Repercussions: The verdict, expected any day, will determine if the president's emergency powers can be used to levy broad tariffs. A ruling upholding the tariffs could intensify the global trade war, further pressuring emerging market currencies. Conversely, a ruling against them might offer temporary relief to global trade flows and market sentiment.

High Economic Stakes: The Trump tariffs represent the largest US tax increase as a percentage of GDP since 1993 and are estimated to reduce long-run US GDP by 0.5% even before accounting for foreign retaliation. The uncertainty they create has already led to reduced hiring and investment in the US manufacturing sector.

What This Means for India: A Double-Edged Sword

A weaker rupee presents a mixed bag for the Indian economy, creating clear winners and losers.

| Potential Benefits | Potential Drawbacks |

| More Competitive Exports: Indian goods become cheaper for foreign buyers. | Imported Inflation: Cost of crude oil, electronics, and other imports rises. |

| Boost for Tourism & Remittances: India becomes a more affordable destination; NRIs get more rupees for their dollars. | Costlier Education & Travel: Studying abroad and overseas trips become significantly more expensive. |

For households, the immediate impact is felt in the wallet. The cost of imported goods, from electronics to fuel, is poised to rise. Perhaps most acutely affected are Indian students abroad and families planning foreign travel, who will need substantially more rupees to meet their dollar-denominated expenses.

Market Outlook: More Volatility Ahead

Forex analysts suggest the rupee may face further pressure. Anuj Choudhary of Sharekhan noted the currency is expected to trade with a "negative bias" due to foreign fund outflows and global risk aversion, with the USD-INR spot price potentially trading in a range of 90.70 to 91.25.

While the Reserve Bank of India (RBI) has been intervening to smooth volatility, it appears focused on preventing disorderly market moves rather than defending a specific level, signaling a tolerance for gradual depreciation. The path forward for the rupee remains inextricably linked to the flow of global capital and the unfolding script of international trade relations.