Carney says Canada has no plans to pursue free trade agreement with China as Trump threatens tariffs

Carney said his latest agreement with China only reduces tariffs on a small number of sectors that have been hit by tariffs recently.

Trump claims otherwise, posting that “China is successfully and completely taking over the great nation of Canada. Very sad to see that happen. I just wish they would leave ice hockey alone! President D.G.T.”

The Prime Minister said that under the free trade agreement with the United States and Mexico, there are obligations not to pursue free trade agreements with non-market economies without prior notification.

“We have no intention of doing this with China or any other non-market economy,” Carney said. “What we have done with China is to correct some of the issues that have developed in the last two years.”

In 2024, Canada follows in the footsteps of the United States by imposing a 100% tariff on electric cars from Beijing and a 25% tariff on steel and aluminium. China responded by imposing 100% import taxes on Canadian canola oil and flour and 25% on pork and seafood.

In a dispute with the United States this month during a visit to China, Carney reduced his tariffs by 100% on Chinese electric cars in exchange for reducing tariffs on those Canadian products.

There will be an initial annual limit of 49,000 vehicles on Chinese electric vehicle exports coming to Canada at a tariff rate of 6.1%, rising to about 70,000 vehicles over five years, Carney said. He noted that there was no cap before 2024. He also said that the initial cap on Chinese electric vehicle imports was about 3% of the 1.8 million vehicles sold in Canada annually, and that in return, China is expected to start investing in the Canadian auto industry within three years.

Trump posted a video on Sunday in which the CEO of the Canadian Automobile Manufacturers Association warns that there will be no Canadian auto industry without access to the United States, while noting that the Canadian market alone is too small to justify large-scale manufacturing from China.

“We must watch it. Canada is systematically destroying itself. The deal with China is a disaster for them. It will be one of the worst deals, of any kind, in history. All their business moves to the United States. I want to see Canada survive and thrive! President D.G.T,” Trump wrote on social media.

Trump’s post on Saturday said that if Carney “thinks he will make Canada a ‘delivery port’ for China to send goods and products to the United States, he is deeply mistaken.”

“We cannot allow Canada to become a port through which the Chinese pump their cheap goods into the United States,” US Treasury Secretary Scott Besent said on ABC’s “This Week.”

“We have a (U.S.-Mexico-Canada Agreement), but on that basis, which will be renegotiated this summer, I’m not sure what Prime Minister Carney is doing here, other than trying to virtue signal his globalist friends in Davos.”

Trump’s threat came amid an escalating war of words with Carney, at a time when the Republican president’s quest to seize Greenland has strained NATO.

Carney has emerged as the leader of a movement aimed at finding ways to connect and confront the United States in the Trump era. Speaking in Davos before Trump, Carney said: “The middle powers have to work together because if you’re not at the table, you’re on the list,” and warned against coercion by the great powers — without naming Trump. The Prime Minister received widespread praise and attention for his remarks, besting Trump at the World Economic Forum.

Trump’s push to seize Greenland came after he repeatedly badgered Canada over its sovereignty and also proposed incorporating it into the United States as the 51st state. He posted an edited 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.