Canadian Prime Minister Mark Carney said on Sunday that his country has no intention of pursuing a free trade deal with China.
He was responding to US President Donald Trump’s threat to impose a 100% tariff on goods imported from Canada if America’s northern neighbour went ahead with a trade deal with Beijing.
Carney said his agreement with China merely cuts tariffs on a few sectors that were recently hit with levies.
Trump claims otherwise, posting on Truth Social: “China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen. I only hope they leave Ice Hockey alone! President DJT”
The Canadian prime minister said under the free trade agreement with the US and Mexico, there are commitments 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. “What we have done with China is to rectify some issues that developed in the last couple of years.”
Tariffs on Chinese EVs
In 2024, Canada mirrored the United States by putting a 100% tariff on electric vehicles from Beijing and a 25% tariff on steel and aluminium.
China had responded by imposing 100% import taxes on Canadian canola oil and meal and 25% on pork and seafood.
Breaking with the United States this month during a visit to China, Carney cut its 100% tariff on Chinese electric cars in return for lower tariffs on those Canadian products.
Carney has said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports coming into Canada at a tariff rate of 6.1%, growing to about 70,000 over five years. He noted there was no cap before 2024. He also has said the initial cap on Chinese EV imports was about 3% of the 1.8 million vehicles sold in Canada annually and that, in exchange, China is expected to begin investing in the Canadian auto industry within three years.
Trump posted a video on Sunday in which the chief executive of the Canadian Vehicle Manufacturers’ Association warns there will be no Canadian auto industry without US access, while noting the Canadian market alone is too small to justify large-scale manufacturing from China.
“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! President DJT,” Trump posted on social media.
Carney’s Davos speech
Trump’s post on Saturday said that if Carney “thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken”.
“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 — based on that, which is going to be renegotiated this summer, and I’m not sure what Prime Minister Carney is doing here, other than trying to virtue-signal to his globalist friends at Davos.”
Trump’s threat came amid an escalating war of words with Carney as the Republican president’s push to acquire Greenland strained the NATO alliance.
Carney has emerged as a leader of a movement for countries to find ways to link up and counter the US under Trump. Speaking in Davos before Trump, Carney said, “Middle powers must act together because if you are not at the table, you are on the menu” and he warned about coercion by great powers — without mentioning Trump’s name. The prime minister received widespread praise and attention for his remarks.
Trump’s push to acquire Greenland has come after he has repeatedly needled Canada over its sovereignty and suggested it also be absorbed into the United States as a 51st state. He posted an altered image on social media this week showing a map of the United States that included Canada, Venezuela, Greenland, and Cuba as part of its territory.
