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Canada’s prime minister, Mark Carney, said on Sunday his country had no intention of pursuing a free trade deal with China, responding to Donald Trump’s threat to impose a 100% tariff on goods imported from Canada if the US’s northern neighbour went ahead with a trade deal with Beijing.
Carney said his recent agreement with China merely cut tariffs on a few sectors that were recently hit with them.
The prime minister said that, under the free trade agreement with the US and Mexico, there were commitments 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. “What we have done with China is to rectify some issues that developed in the last couple of years.”
In 2024, Canada mirrored the US by putting a 100% tariff on electric vehicles from Beijing and a 25% tariff on steel and aluminium. China had responded by imposing 100% import taxes on Canadian canola oil and meal and 25% on pork and seafood.
Breaking with the US this month during a visit to China, Carney cut Canada’s 100% tariff on Chinese electric cars in return for lower tariffs on those Canadian products.
Carney has said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports coming into Canada at a tariff rate of 6.1%, growing to about 70,000 over five years. He noted there had been no cap before 2024. He has also said the initial cap on Chinese EV imports was about 3% of the 1.8million vehicles sold in Canada annually and that, in exchange, China is expected to begin investing in the Canadian auto industry within three years.
Trump made his threat in a social media post, saying that if 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”.
The US treasury secretary, Scott Bessent, said on ABC’s This Week: “We can’t let Canada become an opening that the Chinese pour their cheap goods into the US.
“We have a [United States-Mexico-Canada agreement], but based off – based on that, which is going to be renegotiated this summer, and I’m not sure what prime minister Carney is doing here, other than trying to virtue-signal to his globalist friends at Davos.”
Trump’s threat came amid an escalating war of words with Carney as the Republican president’s push to acquire Greenland strained the Nato alliance.
Carney has emerged as a leader of a movement for countries to find ways to link up and counter the US under Trump. Speaking in Davos before Trump, Carney said: “Middle powers must act together because if you are not at the table, you are on the menu.” He warned about coercion by great powers, without mentioning Trump’s name. The prime minister received widespread praise and attention for his remarks, upstaging Trump at the World Economic Forum.
Trump’s push to acquire Greenland came after he repeatedly needled Canada over its sovereignty and suggested it also be absorbed into the US as a 51st state. He posted an altered image on social media this week showing a map of the US that included Canada, Venezuela, Greenland and Cuba as part of its territory.