Canadian Prime Minister Mark Carney has explicitly stated that Canada will not pursue a comprehensive free trade agreement with China, responding directly to U.S. President Donald Trump’s threat to impose 100% tariffs on Canadian goods should such an arrangement materialize.
The clarification came Sunday as tensions escalate between the neighboring nations regarding trade relationships with Beijing. Carney emphasized that recent tariff adjustments with China merely address specific sectoral issues that emerged in recent years, rather than constituting a broader free trade initiative.
‘Under our existing trade agreement with the United States and Mexico, we have commitments prohibiting the pursuit of free trade agreements with nonmarket economies without prior notification,’ Carney stated. ‘We have no intention of doing that with China or any other nonmarket economy.’
The diplomatic friction originates from Canada’s recent decision to reduce its 100% tariff on Chinese electric vehicles to 6.1%, implemented during Carney’s visit to China earlier this month. In exchange, Beijing agreed to lower tariffs on Canadian agricultural products including canola oil, pork, and seafood that had been affected by previous trade measures.
This arrangement includes an annual cap of 49,000 Chinese EV imports—approximately 3% of Canada’s annual vehicle market—with provisions for gradual increase to 70,000 over five years. Additionally, China committed to investing in Canada’s automotive industry within three years.
President Trump responded vehemently on social media, characterizing the agreement as ‘a disaster for Canada’ and ‘one of the worst deals, of any kind, in history.’ He warned that Canada must not become a ‘drop off port’ for Chinese goods entering the U.S. market.
The trade dispute occurs alongside broader geopolitical tensions, including Trump’s expressed interest in acquiring Greenland and suggestions about Canadian sovereignty. Carney has positioned Canada as a leader among middle powers seeking to counterbalance U.S. influence, notably declaring at Davos that ‘if you are not at the table, you are on the menu’—a remark widely interpreted as criticism of Trump’s approach to international relations.