Canada has no intention of pursuing free trade with China, says Carney

"Carney said his recent agreement with China merely cut tariffs on a few sectors that were recently hit with them. The prime minister said that, under the free trade agreement with the US and Mexico, there were commitments not to pursue free trade agreements with non-market economies without prior notification. We have no intention of doing that with China or any other non-market economy, Carney said."

"In 2024, Canada mirrored the US by putting a 100% tariff on electric vehicles from Beijing and a 25% tariff on steel and aluminium. China had responded by imposing 100% import taxes on Canadian canola oil and meal and 25% on pork and seafood. Breaking with the US this month during a visit to China, Carney cut Canada's 100% tariff on Chinese electric cars in return for lower tariffs on those Canadian products."

"Carney has said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports coming into Canada at a tariff rate of 6.1%, growing to about 70,000 over five years. He noted there had been no cap before 2024. He has also said the initial cap on Chinese EV imports was about 3% of the 1.8million vehicles sold in Canada annually and that, in exchange, China is expected to begin investing in the Canadian auto industry within three years."

Canada has no intention of pursuing a free trade deal with China. Recent measures reduced tariffs on a few sectors that were recently targeted. Commitments under the US-Mexico free trade agreement prohibit pursuing FTAs with non-market economies without prior notification. In 2024 Canada mirrored US tariffs, imposing 100% on Chinese electric vehicles and 25% on steel and aluminium, while China imposed 100% import taxes on Canadian canola products and 25% on pork and seafood. Canada lifted its 100% EV tariff in exchange for lower Chinese tariffs, set initial capped EV import quotas and tariff rates, and anticipates Chinese investment in the Canadian auto industry within three years. The United States warned against Canada becoming an entry point for Chinese goods.

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