Canadian Prime Minister Mark Carney stated that Canada does not plan to sign a free trade agreement with China following former U.S. President Donald Trump’s threat to impose 100% tariffs.
After Trump warned that the U.S. would apply a 100% tariff if Canada pursued a free trade agreement with China, Carney said that Ottawa has “no objective of making a deal with Beijing.”
Speaking to reporters on Sunday, Carney emphasized Canada’s commitment to the Canada–United States–Mexico Agreement (CUSMA/USMCA), stressing that no new trade agreement would be signed without informing Washington and Mexico.
Carney said, “Our arrangement with China is aimed at addressing certain problems that have emerged in recent years and is fully compatible with CUSMA.”
Details of the China–Canada Agreement
Under a preliminary agreement reached on January 16, Canada and China agreed to reduce mutual tariffs on certain products. According to information published on the official website of the Canadian Prime Minister’s Office, Canada will allow 49,000 Chinese-made electric vehicles per year to enter the country at a reduced tariff rate of 6.1%.
In October 2024, Canada had raised tariffs on these vehicles to 100%, in coordination with the United States. In return, China agreed to reduce tariffs on Canadian agricultural products. The tariff on canola oil will be reduced from 85% to 15% starting March 1.
Trump’s 100% Tariff Threat
In a post on Truth Social, Trump said that if Canada enters into a trade agreement with China, Canadian products could face 100% tariffs.
Trump wrote, “If Carney thinks he will turn Canada into a transit point for China to ship goods into the United States, he is mistaken.”
Tensions Rose After the Davos Summit
Tensions between the United States and Canada increased after Carney warned at the World Economic Forum in Davos against major powers exerting economic pressure on smaller countries.
In response, Trump said, “Canada survives thanks to the United States,” and announced last week that Canada had withdrawn its invitation to participate in the ‘Gaza Peace Council’ initiative.