PM Carney rules out China free trade deal after Trump tariff threat on Canadian goods

Canadian Prime Minister Mark Carney firmly dismissed the possibility of a free trade agreement with China on Sunday, responding directly to a threat from U.S. President Donald Trump of imposing 100% tariffs on Canadian exports. Carney emphasized that Ottawa's primary trade commitment remains the Canada-United States-Mexico Agreement (CUSMA) and that any new trade pacts would require prior consultation.

Escalating Tensions Over Trade Policy

The declaration follows a tense exchange triggered by President Trump, who accused Carney on his Truth Social platform of trying to turn Canada into a conduit for Chinese goods, stating, "He is sorely mistaken." This friction intensified after Trump rescinded Canada's invitation to his "Board of Peace" initiative, a move linked to Carney's recent speech in Davos warning against economic coercion by major powers. Despite Trump's past support for Canadian engagement with China, his administration now views Ottawa's recent arrangement with Beijing as a potential risk to U.S. trade security.

Details of the Canada-China Arrangement

The agreement in question, concluded on January 16, permits the annual import of 49,000 Chinese electric vehicles into Canada at a reduced tariff rate of 6.1%. In return, China will significantly lower tariffs on key Canadian agricultural exports, such as canola seed oil, from 85% to 15% starting March 1. Other products including canola meal, lobster, crab, and peas will receive exemptions from Chinese anti-discrimination tariffs until at least the end of 2026. Carney defended the pact, stating, "This deal rectifies some issues that have developed in the last couple of years," and affirmed it is "entirely consistent with CUSMA."