Canadian Prime Minister Mark Carney announced on Sunday that Canada will not pursue a free trade agreement with China, following recent threats from President Trump.
"Under the USMCA, we are committed to not seeking free trade agreements with non-market economies without prior notification. We have no intention of doing so with China or any other non-market economy," Carney stated on Sunday, referencing the North American trade agreement shared with Mexico and the United States.
Carney explained that the agreements made with China during his recent visit to Beijing aim to "address some issues that have arisen over the past couple of years" in the bilateral relationship.
"This aligns perfectly with the USMCA agreement and our commitments, which we uphold," he added.
On Saturday, Trump warned that he would impose a 100% tariff on Canadian exports if Carney's government continues to strengthen ties with China.
Trump's threat follows just days after Carney described relations with China as "more predictable" than those with the United States, a statement that caused unease in Washington.
The U.S. President deemed it "unacceptable" for a longstanding ally to seek closer ties with a "strategic rival."
During his visit to the Great Hall of the People, Carney and Xi Jinping emphasized the importance of a "strategic relationship tailored to the current context," highlighting Canada's intention to diversify its trade partners amid the pressures of Trump's second term.
The meeting, marking the first visit by a Canadian leader to China since 2017, symbolizes Ottawa's effort to mend strained relations since the 2018 arrest of Huawei executive Meng Wanzhou.
In Washington, White House sources indicated that the president views Carney's outreach to Beijing as "a direct threat to North America's economic security."
Consequently, the Trump administration is reportedly considering potential tariffs on Canadian steel, aluminum, and agricultural products, which are pivotal sectors in the bilateral economy.
Impact of US-Canada-China Relations
Why is Canada not pursuing a free trade agreement with China?
Canada is refraining from pursuing a free trade agreement with China due to commitments under the USMCA, which requires notification before engaging in such agreements with non-market economies.
What was the outcome of Carney's visit to China?
Carney's visit to China resulted in agreements aimed at resolving issues in the Canada-China bilateral relationship, emphasizing a strategic partnership in the current global context.
What might be the economic consequences of Trump's threats?
Trump's threats could lead to 100% tariffs on Canadian steel, aluminum, and agricultural products, impacting key sectors of the Canadian economy.