Trump reverses course, supports Canada-China trade deal

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U.S. President Donald Trump was asked to respond to news that Prime Minister Mark Carney and Chinese President Xi Jinping came to an agreement on trade.

“Well, it’s OK. That’s what he should be doing,” Trump told reporters Friday at the White House. “If you can get a deal with China, you should do that.”

Earlier in the day, Trump’s own administration shared conflicting messaging regarding the deal, saying Canada may regret the decision.

“I think it’s problematic for Canada,” U.S. Trade Representative Jamieson Greer told CNBC Friday morning. “There’s a reason why we don’t sell a lot of Chinese cars in the United States. It’s because we have tariffs to protect American auto workers and Americans from those vehicles.”

• READ MORE: Sharan Kaur: Carney’s China trade deal isn’t betrayal — it’s survival

Speaking at the Detroit Economic Club this week, Trump reaffirmed his desire for Chinese automakers to build vehicles in the U.S.

“If they want to come in and build a plant and hire you and hire your friends and your neighbours, that’s great, I love that,” Trump said. “Let China come in.”

What is the deal?

Carney travelled to Beijing this week to help thaw relations between the two countries and secure what he called a “preliminary, but landmark” trade agreement, aimed at ending a tariff war.

The deal centres on a trade-off between agriculture and electric vehicles. Under the agreement, Canada will allow up to 49,000 Chinese EVs in the country yearly at a tariff rate of 6.1 per cent, down from the current 100 per cent.

• READ MORE: ‘Cheap has a price’: Auto industry, unions react to Canada’s EV deal with China

In return, China will significantly reduce or eliminate duties on several major Canadian agricultural exports.

Carney framed the deal as the beginning of a broader strategic partnership that also includes expanding tourism, cultural ties and a commitment from China to allow visa-free travel for Canadians.

The changes are especially significant for Canada’s farm sector. According to Carney, China is expected to cut tariffs on Canadian canola seed to 15 per cent from as high as 84 per cent by March 1, calling it “enormous progress.”

Chinese “anti-discrimination” tariffs on Canadian canola meal, lobster, crabs, and peas will be lifted from March through at least the end of the year, though canola oil will remain subject to a 100 per cent tariff.

• READ MORE: ‘Happy to see progress’: Saskatchewan canola producers react to tariff deal

The deal reopens access to one of Canada’s most important export markets, with China ranking as the second-largest buyer of Canadian canola after the U.S., and the world’s largest market for peas.

In exchange, Ottawa is opening limited space for Chinese EVs in the Canadian market. Carney said half the imported vehicles will be priced under $35,000 by 2030 to improve affordability and stressed the 49,000-vehicle cap nearly matches pre-tariff levels, which represents less than three per cent of the domestic auto market.

The move has divided political leaders, with Ontario Premier Doug Ford warning of risks to Canadian workers, while Saskatchewan Premier Scott Moe praised the deal as a win for exporters.