Canadian Prime Minister Mark Carney stated unequivocally Sunday that his government has "no intention" of pursuing a free trade agreement with China, responding directly to threats from U.S. President Donald Trump to impose punitive 100% tariffs on Canadian exports if such a deal were struck.

"We respect our obligations under CUSMA and we will not pursue a free trade agreement without notifying the other two parties," Carney told reporters, referencing the Canada-U.S.-Mexico trade agreement.

The remarks follow Trump's warning on Truth Social that Canada would become a "target" if it served as a "Drop Off Port" for Chinese goods entering the U.S. market. The exchange marks a sharp escalation in rhetoric between the two leaders, coming just days after Trump withdrew an invitation for Canada to join his proposed "Board of Peace" following Carney's speech at the World Economic Forum, where the Prime Minister cautioned against economic coercion by global superpowers.

Carney defended a recently concluded preliminary trade arrangement with Beijing, which lowers tariffs on select goods such as Chinese electric vehicles and Canadian agricultural products, as "entirely consistent with CUSMA." He described the pact as an effort to "rectify some issues that have developed in the last couple of years."

The tension underscores the fragile state of North American trade relations as the U.S. maintains a 35% tariff on several Canadian exports, including steel and autos, despite the existing trilateral agreement.