Ottawa (Rajeev Sharma): Canadian Prime Minister Mark Carney on Sunday clarified that Ottawa has no plans to pursue a formal free trade agreement with China, responding to sharp warnings from U.S. President Donald Trump over deepening economic ties between the two countries.
Speaking to reporters in Ottawa, Carney said recent discussions with Beijing were aimed at resolving trade imbalances and addressing market access challenges rather than forging a broader trade pact. He pointed to ongoing negotiations related to Chinese electric vehicles, agricultural commodities and seafood exports as part of efforts to stabilise bilateral commerce.
Carney also underlined Canada’s obligations under the Canada-United States-Mexico Agreement (CUSMA), which requires advance notification if any member state seeks a free trade deal with a non-market economy such as China. “We remain fully committed to our international trade agreements and the frameworks that govern them,” he said.
The prime minister’s remarks followed a social media post by Trump on Saturday, in which the U.S. leader threatened to impose sweeping 100 per cent tariffs on Canadian exports should Ottawa proceed with what he described as a “deal” with Beijing. Trump warned that Canada risked becoming a conduit for Chinese goods entering the U.S. market, a scenario he said Washington would not tolerate.
The warning came despite a recent limited trade arrangement between Canada and China that allows controlled imports of Chinese-made electric vehicles at reduced tariff rates, in exchange for tariff relief on Canadian canola and other farm products. Last week, Trump had appeared to welcome the agreement, calling it a reasonable step for Canada to secure better market access.
Clarifying Washington’s position, U.S. Treasury Secretary Scott Bessent said on Sunday that punitive tariffs would be considered only if Canada moved toward a full-scale free trade deal or allowed large-scale diversion of Chinese goods into the United States.
The diplomatic exchange comes at a sensitive moment in Canada–U.S. relations, following Carney’s recent address at the World Economic Forum in Davos, where he criticised the growing use of economic leverage by global powers. Trump later rebuked the remarks, reinforcing Washington’s central role in Canada’s economic stability.
Meanwhile, Canadian Foreign Affairs Minister Anita Anand defended the government’s broader strategy of diversifying trade partnerships, describing it as essential to safeguarding national economic interests. She said Canada would continue building alliances with a range of countries, citing cooperation on Ukraine and upcoming talks in the United States on critical minerals.
“Trade diversification strengthens resilience,” Anand said, adding that Canada would continue expanding economic ties across Asia and beyond to avoid overdependence on any single market.
