In the wake of intensified trade tensions, Canadian Prime Minister Mark Carney has firmly stated that Canada has “no intention” of seeking a free trade agreement with China. This announcement follows a stark warning from U.S. President Donald Trump, who threatened to impose steep tariffs on Canadian goods.

During a press briefing on Sunday, Carney emphasized Canada’s commitment to its existing trade obligations under the Canada-U.S.-Mexico Agreement, known in Canada as CUSMA and in the United States as USMCA. He stressed that any pursuit of a trade deal with another nation, such as China, would be conducted transparently and in consultation with the agreement’s other signatories.

The Prime Minister’s statements were made in response to Trump’s aggressive stance, wherein the U.S. President suggested implementing a 100% tariff on Canadian exports if Ottawa were to engage in a trade deal with Beijing.

Trump expressed his disapproval via a post on Truth Social, stating, “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.” This message underscores the escalating friction between the two neighboring countries.

The backdrop to these heated exchanges includes Trump’s recent decision to retract Canada’s invitation to participate in his “Board of Peace.” This decision followed Carney’s address at the World Economic Forum in Davos, where he cautioned against economic coercion by dominant global powers. Although Carney refrained from naming specific countries in his speech, his comments clearly resonated with Trump.

On the sidelines of the forum, Trump retorted, “Canada lives because of the United States. Remember that, Mark, the next time you make your statements.” This remark highlights the strained relationship and the ongoing power dynamics at play between the two nations.

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.