Canadian Prime Minister Mark Carney is currently walking a tightrope, balancing complex trade relations between China and the United States. He recently clarified that Canada has *no intention* of pursuing a free trade deal with China, a direct response to threats from former U.S. President Donald Trump. Trump had warned of a 100 percent tariff on Canadian goods if Canada pursued such a deal, claiming China was “taking over” the country.
Carney explained that his recent agreement with China was simply about *rectifying* existing tariff issues, not forging a new comprehensive pact. This situation began in 2024 when Canada, mirroring the U.S., placed steep tariffs on Chinese electric vehicles (EVs), steel, and aluminum. China retaliated with tariffs on key Canadian exports like canola oil, pork, and seafood.
During a recent visit to China, Carney cut Canada’s 100 percent tariff on Chinese EVs. In exchange, China reduced its tariffs on those vital Canadian agricultural products. Carney highlighted a cap on Chinese EV imports and future Chinese investment in Canada’s auto industry as part of this recalibration.
However, Trump blasted the move, calling it a “disaster” and fearing Canada would become a “drop off port” for cheap Chinese goods destined for the U.S. U.S. Treasury Secretary Scott Bessent also voiced concerns. Carney, meanwhile, insists Canada adheres to its USMCA commitments, which require notification before striking deals with non-market economies. This trade spat adds to broader U.S.-Canada tensions, with Carney positioning Canada as a leader for “middle powers” in a world of superpower pressures.
