Canada and China have reached an initial trade agreement that reduces tariffs on electric vehicles and canola products, marking renewed strategic engagement during Prime Minister Mark Carney’s visit to Beijing – the first by a Canadian leader since 2017. Under the arrangement, Canada will permit up to 49,000 Chinese EVs annually at a Most-Favored-Nation tariff of 6.1%, replacing a previous 100% rate imposed in 2024. That quota is set to rise gradually to approximately 70,000 vehicles over five years. In 2023, China shipped 41,678 EVs to Canada. Carney stated that access to established EV supply chains and innovation from partners will support Canada’s domestic EV development and consumer demand.
This shift diverges from current U.S. policy, drawing mixed reactions in Washington. While some U.S. officials expressed concern, former president Donald Trump endorsed the deal. In Canada, Ontario Premier Doug Ford criticized the agreement, citing the absence of commitments for immediate investments in local auto manufacturing and supply chains.
In return for easing EV tariffs, China has agreed to lower combined tariffs on Canadian canola seed to about 15% by March 1, down from 84%. Anti-discrimination tariffs on canola meal, lobsters, crabs and peas will also be removed through year-end. Carney estimated these measures will unlock roughly $3 billion in export orders for Canadian farmers, fish harvesters and processors. China’s Commerce Ministry confirmed adjustments to anti-dumping and discriminatory measures on Canadian agricultural and aquatic products in response to Canada’s tariff changes.
Both countries also pledged to resume high-level economic and financial dialogue and deepen cooperation across agriculture, oil, gas and green energy. Carney noted an agreement to grant visa-free access to Canadian travellers and outlined Canada’s plan to double its energy grid capacity over 15 years, highlighting opportunities for Chinese investment in projects such as offshore wind. He added that Canada aims to increase its liquefied natural gas exports to Asia to 50 million tonnes annually by 2030.
Experts suggest the renewed Canada-China engagement could influence the broader context of Sino-U.S. rivalry, though Ottawa remains closely aligned with Washington on security and intelligence matters.
Source: Reuters
