Canada rules out free trade deal with China amid Trump’s tariff threats

Canada has "no intention" to pursue a free trade deal with China, Prime Minister Mark Carney said on Sunday after US President Donald Trump's warning of a 100% tariff on Canadian exports.

Carney emphasized that Ottawa remains committed to its obligations under the Canada-US-Mexico Agreement (CUSMA) and would not move forward with any trade agreements without consultation.

In a Truth Social post on Saturday, Trump accused Carney of attempting to turn Canada into a "drop off port" for Chinese goods, saying: "He is sorely mistaken."

Tensions escalated after Trump rescinded Ottawa's invitation to his "Board of Peace," citing Carney's speech at the World Economic Forum, in which he warned against economic coercion by major powers.

Despite Trump's earlier support for Canada's outreach to China, his administration now views Ottawa's "preliminary agreement" with Beijing as a risk to US trade security.

The deal, concluded on Jan. 16, allows 49,000 Chinese electric vehicles into Canada annually at a 6.1% tariff rate.

In exchange, Beijing will lower tariffs on Canadian agricultural exports, including canola seed oil, dropping from 85% to 15% starting March 1.

Other products, such as Canadian canola meal, lobsters, crabs, and peas, will be exempt from Chinese anti-discrimination tariffs until at least the end of 2026.

"This deal rectifies some issues that have developed in the last couple of years," Carney said. "It is entirely consistent with CUSMA."