Canada has insisted it has no plans to pursue a free trade agreement with China, following tariff pressure from the United States.
Prime Minister Mark Carney said Ottawa will continue to abide by the Canada-US-Mexico trade agreement (CUSMA) and will not sign any free trade agreement without informing major trading partners.
The statement came after US President Donald Trump threatened to impose punitive tariffs of up to 100% on Canadian exports if Ottawa goes ahead with the deal with Beijing. The threat reflects the escalating tensions between the two countries.
US-Canadian relations have been strained again after Trump withdrew Canada's invitation to a US regional security initiative, following Carney's speech at the World Economic Forum warning against economic coercion by major powers.
Trump's rhetoric against Canada has also been linked to Washington's concerns about China's trade influence.
Despite rejecting a new free trade agreement, Canada and China on January 16 signed a preliminary agreement involving selective tariff reductions.
Under the agreement, Canada allowed limited entry of Chinese electric vehicles at lower tariffs, while China reduced duties on some key Canadian agricultural exports.
Canada insisted the move was aimed at resolving existing trade issues and remained consistent with commitments under CUSMA.
At the same time, the US continued to maintain tariffs on several Canadian goods including steel, copper and certain vehicles and parts, although most Canadian exports remain exempt under the regional agreement.
