UPSC Prelims Practice Questions — Trump threatens Canada with 100% tariff over possible deal with China

Q1. Under the preliminary Canada–China trade understanding announced in January 2026, how many Chinese electric vehicles is Canada to admit annually at the preferential most-favoured-nation tariff rate?

  • A. 25,000
  • B. 49,000
  • C. 75,000
  • D. 1,00,000

Q2. With reference to the United States–Mexico–Canada Agreement (USMCA) compared with its predecessor NAFTA, consider the following statements: 1. USMCA replaced NAFTA in 2018 and binds the same three signatory states. 2. Article 32.10 of USMCA requires a member to give the other parties at least three months' notice before commencing free-trade negotiations with a 'non-market country'. 3. NAFTA itself contained an identical 'non-market economy' clause permitting two parties to terminate the agreement if the third concluded a free trade pact with a non-market economy. Which of the statements given above is/are correct?

  1. USMCA replaced NAFTA in 2018 and binds the same three signatory states.
  2. Article 32.10 of USMCA requires a member to give the other parties at least three months' notice before commencing free-trade negotiations with a 'non-market country'.
  3. NAFTA itself contained an identical 'non-market economy' clause permitting two parties to terminate the agreement if the third concluded a free trade pact with a non-market economy.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q3. Among the Canadian exports covered by the January 2026 Canada–China tariff understanding, which one is associated with the LARGEST percentage-point reduction in the Chinese import duty?

  • A. Lobster
  • B. Crab
  • C. Canola seed
  • D. Canola meal

Q4. With reference to the preliminary Canada–China trade understanding announced during PM Mark Carney's January 2026 visit to Beijing, consider the following items and their stated tariff treatment: 1. Canadian canola seed — Chinese tariff to be cut from 84% to about 15%. 2. Canadian lobster and crab — Chinese 25% duties to be suspended through end-2026. 3. Canadian wheat — Chinese 100% duty to be permanently eliminated. 4. Chinese electric vehicles entering Canada — to be admitted at a preferential 6.1% MFN tariff rate up to a fixed annual quota. Which of the above is/are correctly identified?

  1. Canadian canola seed — Chinese tariff to be cut from 84% to about 15%.
  2. Canadian lobster and crab — Chinese 25% duties to be suspended through end-2026.
  3. Canadian wheat — Chinese 100% duty to be permanently eliminated.
  4. Chinese electric vehicles entering Canada — to be admitted at a preferential 6.1% MFN tariff rate up to a fixed annual quota.
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 2 and 4 only
  • D. 1, 2, 3 and 4
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