Canadian Prime Minister Mark Carney said Sunday that Canada has “no intention” of pursuing a free trade agreement with China, responding to President Donald Trump’s threat to impose 100% tariffs on all Canadian goods if Ottawa “makes a deal” with Beijing.
“Canada respects our engagements, our commitments,” Carney told reporters on Sunday at the Liberal party’s national meeting, a day before Parliament resumes on January 26.
“We have commitments under CUSMA [USMCA] 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,” the country’s PM added.
In a short media briefing, Carney said the recent agreement with China was meant to “rectify some issues that developed in the last couple of years” — including in the electric vehicle industry.
“In many respects, we’re going to use the expression back to the future with respect to EVs, with respect to agriculture, with respect to fish products and other food products, but with additional protections,” Carney said.
The Prime Minister noted that the current deal includes safeguards not present before Canada imposed 100% tariffs on Chinese EVs in 2024 — matching the Biden Administration’s decision.
“Back in 2023, we didn’t have a cap on the number of EVs. We didn’t have a requirement for a large proportion of those EVs to be affordable, highly affordable EVs for Canadians,” he said.
“It’s entirely consistent with CUSMA, with our obligations, which we very much respect under CUSMA, and we’ll continue to work that way forward,” Carney added.
Below is the video of Mark Carney’s full answer — courtesy of CPAC.
Earlier this month, when announcing the deal for nearly 50,000 EVs at a much lower tariff, Carney praised China’s strengths in the electric vehicle sector naming them “undeniable.”
“They produce some of the most affordable and energy-efficient vehicles in the world,” Canada’s PM said.
Trump’s Threat
Trump threatened on Saturday to impose 100% tariffs on all Canadian goods if Ottawa strikes a trade deal with China, without specifying what constitutes a “deal.”
“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,” Trump wrote on Truth Social.
“China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” the US President added before threatening Canada with 100% tariffs.
“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.
The post came after Carney warned attendees at the World Economic Forum in Davos earlier in the week that the post-war international order is fraying amid great-power rivalry.
Reversal Eight Days Later
Trump’s threat came eight days after the US President endorsed Canada’s decision to sharply lower tariffs on Chinese electric vehicles.
The agreement announced during Carney’s state visit to Beijing allows up to 49,000 Chinese electric vehicles into Canada annually at a 6.1% tariff rate, replacing the 100% duty imposed in 2024.
Amid the announcement, Carney said that the agreement will “drive considerable Chinese investment into Canada’s auto sector, create good careers in Canada, and accelerate our progress toward a net zero future.”
US Commerce Secretary Howard Lutnick called the Canada-China deal “the silliest thing” he’s ever seen earlier this week.
China’s Reactions
Chinese Ambassador to Canada Cong Peiwu said earlier this week that the tariff agreement would create more jobs in Canada’s auto sector.
The diplomat’s comments came as Chinese automakers began weighing entry into the Canadian market following the trade deal.
Chery Automobile became the first Chinese automaker known to be preparing for the Canadian market after the tariff reduction. T
he Wuhu-based company has started hiring in Canada, posting job listings for positions including sales and service roles, according to local reports.
China’s giant Geely Group, the parent company of Volvo and Polestar, said it views the Canada tariff cut as a positive step for North American expansion despite affecting its brands differently.
The company confirmed at CES earlier this month that it was “actively evaluating” a US launch and planned an announcement within the next few years.
Lotus, the British sports car maker owned by Geely, said the Canada tariff cut will nearly halve the price of its Eletre SUV in the country. The model is produced at Geely’s factory in Wuhan, China.
