Trump’s Canada bridge meltdown dismissed by UBS as an unlikely TACO trade ‘in the post-Heated Rivalry environment’

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.”

Negotiations were to start “immediately,” Trump said.

Writing on X, Michigan’s Democratic Senator Elissa Slotkin wrote that cancelling the opening of the bridge would have “serious repercussions” for the economy of her state. She said it would entail higher costs for Michigan businesses, leave supply chains less secure, and ultimately lead to fewer jobs.

“With this threat, the President is punishing Michiganders for a trade war he started,” the senator added. “The only reason Canada is on the verge of a trade deal with China is because President Trump has kicked them in the teeth for a year.”

The nosedive in relations between America and its neighbour had little impact on markets this morning. One could argue a spat over a bridge may not have ramifications large enough for Wall Street to take much notice, but analysts, at this stage, are also familiar with the “TACO” trade—the notion that Trump Always Chickens Out.

As UBS’s Paul Donovan noted this morning: “Despite the tone of the statements, markets are likely to discount this rhetoric (tariffs on U.S. importers of goods from Iranian trading partners, 100% tariffs on U.S. importers of Canadian goods, and 50% tariffs on US importers of Canadian aircraft have yet to materialize).”

Trump claims China would end ice hockey

Trump also made an unusual claim about the nation’s national sport. He said: “The first thing China will do is terminate all Ice Hockey being played in Canada, and permanently eliminate The Stanley Cup.”

As one of Canada’s most popular sports in terms of participation and viewing figures, this seems unlikely, with Donovan joking even more so thanks to a recently popular TV show: ‘Heated Rivalry.’ The show, created and produced in Canada and shot in Ontario, follows the forbidden love affair between two rival hockey stars.

Donovan mused that Trump’s suggestion that “a trade deal with China would result in ice hockey being banned in Canada … might perhaps underestimate the general Canadian support for ice hockey, particularly in the post-‘Heated Rivalry’ environment.”

This story was originally featured on Fortune.com