Canadian PM Mark Carney says he’s not pursuing trade deal with China as Donald Trump threatens 100pc tariffs

Canada has “no intention” of pursuing a free trade deal with China, Prime Minister Mark Carney said, after US President Donald Trump threatened to slap punitive tariffs on his northern neighbour.

Mr Carney said that the country respects its obligations under the Canada-US-Mexico trade agreement, known as CUSMA in Canada and the USMCA in the US, and will not pursue a free trade agreement without notifying the other two parties.

His remarks come after Mr Trump threatened to put a 100 per cent tariff on Canadian exports if Canada “makes a deal” with Beijing.

“If Governor 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,” Mr Trump posted on Truth Social on Saturday.

The remarks come against the backdrop of rising tensions between the US and Canada, with Mr Trump last week withdrawing the invitation to Canada to join his Board of Peace, after Mr Carney in his address at the World Economic Forum in Davos warned against economic coercion by the world’s superpowers.

While Mr Carney did not name any country, Mr Trump said on the sidelines of the WEF that “Canada lives because of the United States. Remember that, Mark, the next time you make your statements”.

Mr Trump’s fiery rhetoric on Truth Social contrasts with what he said after the agreement between Canada and Beijing earlier this month, “that’s what he [Carney] should be doing. It’s a good thing for him to sign a trade deal. If you can get a deal with China, you should do that.”

Treasury Secretary Scott Bessent also echoed Mr Trump’s sentiments on Canada and China, telling ABC News on Sunday that the U.S could not “let Canada become an opening that the Chinese pour their cheap goods into the US”.

On January 16, Canada and Beijing concluded a “preliminary agreement,” with both sides lowering tariffs on select goods.

Under the agreement, Canada will allow 49,000 Chinese electric vehicles into the market annually at a lowered tariff rate of 6.1 per cent, after raising tariffs on such vehicles to 100 per cent in October 2024 in conjunction with the US.

In return, Beijing will cut duties on Canadian agricultural exports, including on canola seed oil, which will see tariffs drop to 15 per cent from March 1, down from the current 85 per cent.

Other exports, such as Canadian canola meal, lobsters, crabs, and peas will also not be subject to Chinese anti-discrimination tariffs until at least the end of 2026.

“What we have done with China is to rectify some issues that have developed in the last couple of years,” Mr Carney said on Sunday, adding that the deal was “entirely consistent with CUSMA”.

In August 2025, Mr Trump raised tariffs on Canadian goods to 35 per cent from 25 per cent. Duties aren’t imposed on most Canadian exports under CUSMA, but some goods, including steel, copper and certain autos and auto parts, are subject to US tariffs.

CNBC