BEIJING: Canada and China have struck an initial trade deal to cut tariffs on electric vehicles and canola, Prime Minister Mark Carney said on Friday, as both nations promised to tear down trade barriers while forging new strategic ties.
The first Canadian prime minister to visit since 2017, Carney sought to rebuild ties with his country’s second-largest trading partner after the United States following months of diplomatic efforts.
Canada will initially allow in up to 49,000 Chinese electric vehicles at a tariff of 6.1% on most-favoured nation-terms, Carney said after talks with Chinese leaders, including President Xi Jinping. He did not specify a time period.
“This is a return to levels prior to recent trade frictions, but under an agreement that promises much more for Canadians,” he told reporters in Beijing.
The figure compares with a 100% tariff on Chinese electric vehicles imposed by the government of former Prime Minister Justin Trudeau in 2024, following similar U.S. penalties. In 2023, China exported 41,678 EVs to Canada.
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Trudeau justified the tariff on the grounds of an unfair global market edge for Chinese manufacturers benefiting from state subsidies, a scenario threatening to domestic industry.
“For Canada to build its own competitive EV sector, we will need to learn from innovative partners, access their supply chains, and increase local demand,” Carney said.He pointed to a stronger partnership with China in clean energy storage and production, driving new investments.
Carney said he expected the EV pact would drive “considerable” Chinese investment into Canada’s auto sector, create good careers in Canada and speed it towards a net zero future.
AGRI-FOOD PARTNERSHIPLast March, in retaliation for Trudeau’s tariffs, China levied tariffs on more than $2.6 billion of Canadian farm and food products, such as canola oil and meal, followed by tariffs on canola seed in August.
That led to a slump of 10.4% in China’s 2025 imports of Canadian goods.
Under the new deal, Carney said, Canada expects China will lower tariffs on its canola seed by March 1, to a combined rate of about 15%.
“This change represents a significant drop from current combined tariff levels of 84%,” he said, adding that China was a $4-billion canola seed market for Canada.
In addition, Canada expects its canola meal, as well as lobsters, crabs, and peas to be freed from anti-discrimination tariffs from March 1, until at least year-end, he added.
The deals will unlock nearly $3 billion in export orders for Canadian farmers, fish harvesters, and processors as they realise the full potential of the Chinese market Carney said.
CHINA ‘MORE PREDICTABLE’Canada is strengthening ties with the world’s second-biggest economy after U.S. President Donald Trump imposed tariffs on some of its goods and suggested the longtime U.S. ally could become the country’s 51st state.
China, similarly hit by Trump’s tariffs since he returned to the White House last year, is also keen to cooperate with a Group of Seven nation in a traditional sphere of U.S. influence.
“In terms of the way our relationship has progressed in recent months with China, it is more predictable, and you see results coming from that,” Carney said in response to media queries whether it was a more predictable and reliable partner than the United States.
