Canada does not plan to pursue a free trade deal with China, said Prime Minister Mark Carney, after United States President Donald Trump threatened to add a 100% tariff on Canadian goods.
Canada agreed to lower tariffs on Chinese electric vehicles earlier in January, in exchange for China doing so on Canadian canola products. “If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A.,” Trump wrote over the weekend.
“We have commitments under CUSMA not to pursue free trade agreements with non-market economies without prior notification,” Carney told reporters. CUSMA, also known as the United States-Mexico-Canada Agreement or USMCA, is a free trade agreement between the three countries that took effect in 2020.
“We have no intention of doing that with China or any other non-market economy.”
Under Canada’s agreement with China, Canada will allow up to 49,000 Chinese EVs to be imported with a tariff of 6.1%, down from the 100% tariff imposed alongside the U.S. in 2024. China will lower tariffs on Canadian canola seed from 85% to 15%.
Canada also hopes to increase exports to China by 50% by 2030, it said.
Trump had praised this agreement at the time, saying: “If you can get a deal with China, you should do that.”
The threat to increase tariffs came after Trump rescinded his invitation for Canada to join his Board of Peace initiative to oversee Gaza. Carney had indicated that while Canada would join, it would not pay the US$1 billion membership fee that Trump has told permanent members to contribute.
