Image: from Azrael . X@nONsToP_aStUr
By Open Chronicle News Desk
OTTAWA — In a dramatic shift in its global trade policy, the Canadian government has officially terminated long-standing discussions regarding a Free Trade Agreement (FTA) with China. The decision, announced on Monday, comes in direct response to mounting pressure from the United States and explicit threats of crippling tariffs from President Donald Trump.
The move marks a significant victory for the Trump administration’s “America First” trade strategy, which seeks to isolate China and reshape North American supply chains. President Trump had previously warned that any nation entering into “back-door” trade deals with Beijing would face a minimum 25% tariff on all exports to the United States. This threat posed an existential risk to Canada, which sends over 75% of its exports south of the border.
Mark Carney responds to Trump's 100% tariff threat at Liberal caucus
Canada clarifies no free trade agreement with China is 🅱️eing pursued
Deal limited to EV tariffs, agriculture, fishing within existing CUSMA framework
Parliament returns January 26 as trade tensions escalate pic.twitter.com/sUM42yqHxN
— Boi Agent One (@boiagentone) January 25, 2026
“Our relationship with our neighbors and largest trading partner is our top priority,” a Canadian government official stated. “While we seek to diversify our markets, we must ensure that our trade policies are aligned with the security and economic stability of the North American bloc.”
The termination of the China talks reflects the reality of the “USMCA era,” where the United States increasingly wields its market power to dictate the trade boundaries of its allies. Analysts suggest that Canada’s retreat is a calculated move to protect its automotive, energy, and agricultural sectors from U.S. retaliation, even if it means alienating Beijing.
In Beijing, the reaction was swift and critical. A spokesperson for the Chinese Ministry of Foreign Affairs accused Canada of “sacrificing its sovereignty” and yielding to “protectionist bullying.”
As Canada pivots away from China, it is expected to double down on trade relations within the G7 and the Trans-Pacific Partnership (CPTPP), while scrambling to secure its standing in Washington before the next round of USMCA reviews. The decision underscores a growing trend of global “de-risking” as Western nations are forced to choose between the world’s two largest economies.