Mark Carney, Canada’s prime minister, after speaking in Quebec City, Quebec, Canada, on Thursday, Jan. 22, 2026.
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Canada has “no intention” of pursuing a free trade deal with China, Prime Minister Mark Carney said, after U.S. President Donald Trump threatened to slap punitive tariffs on Ottawa.
Speaking to reporters on Sunday, Carney said that the country respects its obligations under the Canada-U.S.-Mexico trade agreement, known as CUSMA in Canada and the USMCA in the U.S., and will not pursue a free trade agreement without notifying the other two parties.
Carney’s remarks come after Trump threatened to put a 100% tariff on Canadian exports if Ottawa “makes a deal” with Beijing.
“If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump posted on Truth Social Saturday.
The remarks come against the backdrop of rising tensions between the U.S. and Canada, with Trump last week withdrawing the invitation to Ottawa to join his “Board of Peace,” after Carney in his address at the World Economic Forum in Davos warned against economic coercion by the world’s superpowers.
While Carney did not name any country, Trump said on the sidelines of the WEF that “Canada lives because of the United States. Remember that, Mark, the next time you make your statements.”
Trump’s fiery rhetoric on Truth Social contrasts with what he said after the agreement between Ottawa and Beijing earlier this month, “that’s what he [Carney] should be doing. It’s a good thing for him to sign a trade deal. If you can get a deal with China, you should do that.”
Treasury Secretary Scott Bessent also echoed Trump’s sentiments on Canada and China, telling ABC News on Sunday that the U.S could not “let Canada become an opening that the Chinese pour their cheap goods into the U.S.”
On Jan. 16, Ottawa and Beijing concluded a “preliminary agreement,” with both sides lowering tariffs on select goods.
Under the agreement, Canada will allow 49,000 Chinese electric vehicles into the market annually at a lowered tariff rate of 6.1%, after raising tariffs on such vehicles to 100% in October 2024 in conjunction with the U.S.
In return, Beijing will cut duties on Canadian agricultural exports, including on canola seed oil, which will see tariffs drop to 15% from March 1, down from the current 85%.
Other exports, such as Canadian canola meal, lobsters, crabs, and peas will also not be subject to Chinese anti-discrimination tariffs until at least the end of 2026.
Carney said Sunday: “What we have done with China is to rectify some issues that have developed in the last couple of years,” adding that the deal was “entirely consistent with CUSMA.”
In August 2025, Trump raised tariffs on Canadian goods to 35% from 25%. Duties aren’t imposed on most Canadian exports under CUSMA, but some goods, including steel, copper and certain autos and auto parts, are subject to U.S. tariffs.
— CNBC’s Terri Cullen contributed to this report.
