Canada rules out China trade deal after Trump's tariff threat
What's the story
Canadian Prime Minister Mark Carney has ruled out a free trade agreement with China. The decision comes after United States President Donald Trump threatened to impose 100% tariffs on Canadian goods if such an agreement was pursued. Speaking to reporters, Carney clarified that recent talks with Beijing were only aimed at resolving specific tariff disputes, not expanding trade ties.
Trade commitments
Carney reiterates commitment under CUSMA
Carney reiterated Canada's commitment under the Canada-United States-Mexico Agreement (CUSMA), which prohibits pursuing free trade agreements with non-market economies without prior notification. He said, "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, referring to free trade agreements with China.
Tariff warning
Trump's initial threats against Canada
Trump on Saturday had warned Canada of dire consequences if it deepened trade ties with China. He accused Beijing of destroying Canada's economy and warned Ottawa against becoming a gateway for Chinese goods into the US. However, after his initial threats, Trump's tone softened toward Ottawa as he turned his focus on China. "China is successfully and completely taking over the once Great Country of Canada. So sad to see it happen," he wrote in one post.
Tariff adjustment
Canada adjusts tariffs after retaliatory measures
Canada had earlier matched Washington's trade measures, imposing a 100% tariff on Chinese electric vehicles and 25% tariffs on steel and aluminum in 2024. In return, Beijing imposed heavy duties on Canadian exports such as canola oil, pork, and seafood. This month, Canada revised its position during a visit to China by lowering its tariff on Chinese electric vehicles in exchange for lower Chinese tariffs on Canadian agricultural products.
Trade dynamics
US Treasury Secretary expresses concern over trade dynamics
Earlier this week, US Treasury Secretary Scott Bessent had expressed concern that Canada could become a gateway for Chinese goods into the US market. He said, "We can't let Canada become an opening that the Chinese pour their cheap goods into the US." Bessent also questioned Carney's actions, saying they seemed more about signaling to globalist friends than addressing trade concerns.