Canada rules out China FTA as Trump threatens 100% tariffs
Canada rules out China FTA as Trump threatens 100% tariffs
Canada rules out pursuing a China FTA amid Trump’s 100% tariff threats, while outlining limited tariff tweaks and a cap on Chinese EV imports.
Canada has reiterated that it has no plans to pursue a free trade agreement with China, even as U.S. President Donald Trump threatens to impose a 100% tariff on Canadian goods if Ottawa advances a deal with Beijing. The stance comes as Prime MinisterMark Carney stressed that, under the USMCA, commitments block new FTAs with non-market economies without prior notification, and that Canada has no intention of doing so with China or any other non-market economy. He added that recent dealings with China were aimed at rectifying issues that developed in the past rather than expanding trade ties.
Historically, Canada mirrored some U.S. tariff moves in 2024 by applying a 100% tariff on electric vehicles from China, alongside a 25% levy on steel and aluminum. China retaliated with 100% import taxes on Canadian canola oil and meal, and 25% on pork and seafood. In a recent phase of engagement, a visit to China led to the partial reduction of the 100% tariff on Chinese EVs, paired with a plan to cap imports at an initial 49,000 vehicles per year at a tariff rate of 6.1%, with a trajectory toward roughly 70,000 vehicles over five years. The cap represents a shift from the pre-2024 regime and is pegged to China’s broader willingness to invest in Canada’s auto sector within about three years. Trump’s online post echoed the broader tariff tensions, warning that China is disrupting the Canadian market and tying into the broader dispute between the two countries.
To further insulate domestic interests amid the trade frictions, Ottawa has rolled out a Buy Canadian policy, prioritizing domestic sourcing for national projects. The move signals a strategic emphasis on supporting Canadian industries even as the country navigates the pressures of a volatile U.S.-China trade relationship. While the stance emphasizes sovereignty over tariff policy, the surrounding discourse underscores how interconnected supply chains and political rhetoric continue to shape trade policy across North America.
