Canada rules out China FTA amid Trump’s 100% tariff threat
Canada rules out China FTA amid Trump’s 100% tariff threat
Canada says no plans for a China free-trade deal as Trump warns of 100% tariffs, sticking to commitments under CUSMA and resolving existing tariff disputes with Beijing.
Canada has signaled it has no intention of pursuing a free trade pact with China, even as U.S. President Donald Trump threatens 100% tariffs on Canadian goods should Ottawa move ahead with a deal with Beijing. The stance comes as Ottawa seeks to navigate a broader trade landscape shaped by the U.S.-China and U.S.-Canada tensions, all within the framework of the CUSMA commitments that require prior notification before pursuing any FTAs with non-market economies.
During a recent round of negotiations and engagements with Beijing, Canada cut its 100% tariff on Chinese electric cars in exchange for lower tariffs on some Canadian products, marking a break with the United States on the approach to China. Canada previously mirrored U.S. tariff actions by slapping a 100% tariff on electric vehicles from China and a 25% tariff on steel and aluminum. China, in response, imposed 100% import taxes on Canadian canola oil and meal and 25% on pork and seafood.
In the evolving trade arrangement, Canada has set an initial annual cap of 49,000 Chinese EV exports to Canada at a tariff rate of 6.1%, with a plan to grow to about 70,000 over five years. There was no cap before 2024, and the cap is described as roughly 3% of Canada’s roughly 1.8 million vehicles sold domestically each year. The goal of these steps, according to officials, is to foster a pathway for Chinese EVs while encouraging China to begin investing in the Canadian auto sector within about three years.
Trump’s promotion of a 100% tariff stance and his own videos have underscored how geopolitics are shaping Canada’s approach to trade with China. Ottawa’s position remains focused on resolving tariff disputes within the existing framework and avoiding broad new trade pacts with non-market economies at this time.
