Canada has ‘no intention’ of China trade deal, Carney says after Trump tariff threat

Carney rules out China free trade pact as Trump threatens 100% tariffs

• Canada says it will not pursue a free trade deal with China
• Carney insists Canada remains bound by US-Mexico-Canada trade pact
• Canada capped Chinese EV imports, lowered tariffs for reduced Chinese duties.

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Canadian Prime Minister Mark Carney said that Ottawa has no intention of pursuing a free trade agreement with China, pushing back against US President Donald Trump’s claims that Canada is drifting closer to Beijing.

Carney’s remarks came a day after Trump warned he would impose 100 per cent tariffs on Canadian goods if Ottawa followed through on a trade deal with China. Trump accused Canada of risking its economy by deepening ties with Beijing and warned against allowing Chinese goods access to the US market through Canada.

“We have commitments under CUSMA not to pursue free trade agreements with non-market economies without prior notification. We have no intention of doing that with China or any other non-market economy,” Carney said on Sunday.

“What we have done with China is to rectify some issues that developed in the last couple of years.”

Carney stressed that Canada remains bound by its trade pact with the United States and Mexico and said recent engagement with China was limited to resolving tariff disputes rather than opening broader market access.

Trump issued his warning on Saturday through a series of social media posts, claiming China posed a threat to Canada’s economy. “China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” Trump wrote on Truth Social.

Although Trump later appeared to soften his tone towards Ottawa, he continued to criticise China and Canada’s engagement with Beijing. “China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen,” he wrote in a subsequent post.

In another message, Trump added: “A MUST WATCH. Canada is systematically destroying itself. The China deal is a disaster for them. Will go down as one of the worst deals, of any kind, in history. All their businesses are moving to the USA. I want to see Canada SURVIVE AND THRIVE!”

Canada’s position follows a period of escalating trade tensions. In 2024, Ottawa mirrored Washington by imposing 100 per cent tariffs on Chinese electric vehicles and 25 per cent tariffs on steel and aluminium, prompting Beijing to retaliate with steep duties on Canadian exports, including canola oil, por,k and seafood.

Earlier this month, Canada adjusted its approach during a visit to China, cutting its 100 per cent tariff on Chinese electric vehicles in exchange for lower Chinese tariffs on Canadian agricultural products. Carney said the agreement was aimed at stabilising trade.

He outlined a capped system allowing 49,000 Chinese electric vehicles annually to enter Canada at a 6.1 per cent tariff, rising to about 70,000 over five years. Carney said the cap represents roughly 3 per cent of Canada’s annual vehicle sales, adding that China is expected to begin investing in Canada’s auto sector within three years.

The Trump administration has warned that Canada could become a gateway for Chinese goods entering the US.

“We can’t let Canada become an opening that the Chinese pour their cheap goods into the US,” US Treasury Secretary Scott Bessent said on ABC’s This Week. "We have a (United States–Mexico–Canada Agreement), but based off that — which is going to be renegotiated this summer — I’m not sure what Prime Minister Carney is doing here, other than trying to virtue-signal to his globalist friends at Davos.”

The dispute comes amid a broader war of words between Trump and Carney, with tensions also flaring over US pressure on allies and Trump’s push to acquire Greenland. Speaking earlier at the World Economic Forum in Davos, Carney said, “Middle powers must act together because if you are not at the table, you are on the menu,” warning against coercion by larger states.