Carney’s remarks came a day after Trump threatened to impose a 100 per cent tariff on all Canadian goods entering the United States if Ottawa signed a free trade deal with China. Speaking to reporters, Carney said Canada remains fully aligned with its existing trade commitments and has no plans to enter into any such agreement with a “non-market economy.”
“Under the Canada–US–Mexico Agreement, we are required to give notice before entering into a free trade agreement with a non-market economy,” Carney said. “We have no intention of doing such trade with China or any other such country.”
Trump’s warning was issued through a series of social media posts, in which he accused Canada of potentially allowing Chinese goods to be routed into the US market. He claimed that deeper Canada–China trade ties would harm North American security and warned of immediate retaliatory action if Ottawa proceeded with any formal agreement.
The exchange has brought renewed attention to Canada’s delicate position between its largest trading partner, the United States, and China, one of its major global trade counterparts. The US and Canada are each other’s biggest trading partners, with goods and services worth roughly ₹15,000 crore exchanged daily. In 2024, bilateral trade was valued at approximately ₹79 lakh crore.
Tensions have been building since Carney’s official visit to China from January 13 to 17, during which several sector-specific trade arrangements were discussed. These included a decision to significantly reduce tariffs on Chinese electric vehicles imported into Canada. The revised tariff is set to drop from 100 per cent to 6.1 per cent for a limited annual quota, in exchange for China cutting retaliatory duties on key Canadian agricultural products.
Trump has criticised these moves, accusing Canada of drifting away from the US. He has also expressed frustration over Carney’s opposition to the proposed “Golden Dome” missile defence project and has repeatedly made controversial remarks suggesting Canada should become the 51st US state—comments Ottawa has firmly rejected.
Carney has stressed that Canada’s economic and security policies remain independent and rooted in national interest. Analysts say the prime minister’s statement is aimed at reassuring Washington ahead of the scheduled 2026 review of the USMCA, while maintaining pragmatic economic engagement with China short of a formal trade pact.
