Canada Rejects China FTA Amid Rising Trade Tensions
Canadian Prime Minister Mark Carney has firmly stated that Canada has no plans to pursue a free trade agreement (FTA) with China, responding directly to strong warnings from US President Donald Trump. The statement comes at a sensitive moment for global trade, as geopolitical tensions and economic nationalism continue to shape international relationships.
Carney’s remarks were made just a day after Trump threatened to impose a 100% tariff on Canadian goods if Ottawa moved ahead with a free trade deal with China. The warning has sparked widespread debate about Canada-US trade relations and the future of North American economic cooperation.
What Mark Carney Said
Addressing the issue, Carney clarified Canada’s position under the Canada-US-Mexico Agreement (CUSMA).
“Under CUSMA, we are required to give notice before entering into any free trade agreement with a non-market economy. We have no intention of doing such trade with China or any other similar country,” Carney said.
This clear message was aimed at calming concerns in Washington while reinforcing Canada’s commitment to existing trade frameworks.
Trump’s Tariff Threat and Strong Rhetoric
President Trump, in a series of social media posts, accused Canada of potentially becoming a gateway for Chinese goods into the US. He warned that China would “harm Canada’s business, society, and lifestyle” and claimed that any Canada-China FTA would trigger immediate and severe trade penalties.
Trump also linked his anger to Carney’s opposition to the proposed Golden Dome missile defense project, further escalating diplomatic tensions between the two neighbors.
Canada-China Trade: What’s Really Happening?
While Canada insists there is no formal FTA with China, recent developments have raised eyebrows in Washington. During Carney’s visit to China from January 13 to 17, several trade-related agreements were signed, including:
Reduction of tariffs on Chinese electric vehicles (EVs) from 100% to 6.1%
Annual import cap of 49,000 EVs, potentially rising to 70,000
China cutting retaliatory tariffs on Canadian agricultural products from 84% to 15%, with possible zero tariffs later this year
Experts say these steps are more about trade normalization than a strategic shift.
Why Canada-US Trade Still Matters Most
Despite the noise, Canada-US trade relations remain the backbone of Canada’s economy:
Daily trade worth nearly ₹15,000 crore
Total bilateral trade of around ₹79 lakh crore in 2024
USMCA allows duty-free access for about 81% of imports
Canada supplies major energy resources, auto parts, timber, and farm goods to the US
Canada also depends heavily on the US for technology, machinery, medicines, and consumer products.
Bigger Picture: Politics, Security, and Sovereignty
Trump’s repeated comments about making Canada the 51st state of the US and his Greenland-linked Golden Dome ambitions have added political strain. Carney has firmly rejected these ideas, stating that “Canada is not for sale.”
A Delicate Balancing Act
The statement that there are no plans to pursue an FTA with China reflects Canada’s effort to balance economic interests with strategic alliances. As global trade becomes increasingly politicized, Canada appears focused on protecting its sovereignty while preserving its most critical partnership—with the United States.
For now, Ottawa’s message is clear: cooperation yes, confrontation no—but not at the cost of national interest.
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