Canadian Prime Minister Mark Carney speaks in Quebec City, Quebec, Canada, Thursday, January 22, 2026.
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Prime Minister Mark Carney said Canada has “no intention” of pursuing a free trade agreement with China after U.S. President Donald Trump threatened to impose punitive tariffs on Ottawa.
Carney told reporters on Sunday that Canada respects its obligations under the Canada-United States-Mexico Trade Agreement, known as CUSMA and USMCA in the United States, and does not intend to pursue a free trade agreement without notifying the other two countries.
Carney’s comments came after President Trump threatened to impose 100 per cent tariffs on Canadian exports if Ottawa makes a “deal” with Beijing.
“If Governor Carney thinks Canada is going to be a ‘port of call’ for China to send goods and products to the United States, he is sorely mistaken,” President Trump posted on Truth Social on Saturday.
The comments come amid rising tensions between the United States and Canada, and President Trump last week withdrew his invitation to Ottawa to serve on a “peace commission” after Carney warned of economic coercion by the world’s superpowers in a speech at the World Economic Forum in Davos.
Mr. Carney did not name any countries, but Mr. Trump said on the sidelines of the WEF: “Canada lives because of the United States. Mark, please remember that next time you speak.”
Trump’s fiery comments on Truth Social stand in contrast to what he (Carney) said after the deal between Ottawa and Beijing earlier this month: “That’s what he (Mr. Carney) should do. It’s good for him to sign trade deals. If he can get a deal with China, he should do it.”
Treasury Secretary Scott Bessent echoed President Trump’s sentiments about Canada and China, telling ABC News on Sunday that the United States “cannot leave Canada open to China funneling cheap goods into the United States.”
On January 16, Ottawa and China signed a “preliminary agreement” under which both sides will reduce tariffs on some items.
Under the agreement, Canada will work with the United States to raise tariffs on Chinese-made electric vehicles to 100% in October 2024, and then allow 49,000 Chinese-made electric vehicles to enter the market with tariffs reduced to 6.1% annually.
In return, the Chinese government will reduce tariffs on Canadian agricultural exports, including canola seed oil, which will be reduced from the current 85% to 15% starting March 1.
Other Canadian exports, such as canola meal, lobster, crab and peas, will also not be subject to China’s anti-discriminatory tariffs until at least the end of 2026.
“What we’ve been doing with China is rectifying some of the issues that have arisen over the past few years,” Secretary Carney said Sunday, adding that the agreement is “fully consistent with CUSMA.”
In August 2025, President Trump increased tariffs on Canadian products from 25% to 35%. Although most Canadian exports are not subject to tariffs under CUSMA, some items, such as steel, copper, and certain automobiles and auto parts, are subject to U.S. tariffs.
—CNBC’s Terry Cullen contributed to this report.
