The deal was unveiled during Carney’s official visit to Beijing, the first by a Canadian prime minister since 2017, as Ottawa seeks to rebuild relations with its second-largest trading partner after the United States following months of diplomatic engagement.
Under the agreement, Canada will allow the import of up to 49,000 Chinese electric vehicles under a tariff rate of 6.1 percent on most-favoured-nation terms. Carney did not specify the timeframe for the quota. The move marks a sharp reversal from the 100 percent tariff imposed in 2024 by former prime minister Justin Trudeau, which followed similar measures by the United States. In 2023, China exported more than 41,000 EVs to Canada.
“This restores trade to levels seen before recent frictions, but under an agreement that offers far greater benefits for Canadians,” Carney said after meetings with Chinese leaders, including President Xi Jinping.
Trudeau had justified the higher tariffs by citing what he described as unfair advantages enjoyed by Chinese manufacturers due to state subsidies, which he said threatened Canada’s domestic auto industry. Carney, however, argued that building a competitive Canadian EV sector requires access to global supply chains, collaboration with innovative partners, and stronger domestic demand.
He said the agreement could lead to significant Chinese investment in Canada’s automotive and clean energy sectors, supporting job creation and accelerating the country’s transition toward net-zero emissions.
The deal has drawn criticism at home, particularly from Ontario Premier Doug Ford, who warned that the federal government was opening the door to a surge of low-cost Chinese EVs without firm guarantees of investment in Canada’s auto industry or supply chains.
On the agricultural front, the agreement is expected to ease long-standing trade tensions. In retaliation for Canada’s 2024 EV tariffs, China had imposed duties on more than $2.6 billion worth of Canadian agricultural and food exports, including canola products, leading to a sharp decline in Canadian exports to China.
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Carney said China is expected to reduce tariffs on Canadian canola seed to a combined rate of about 15 percent by March 1, down from current levels of up to 84 percent. He added that anti-discrimination tariffs on canola meal, lobsters, crabs, and peas are also expected to be lifted from March 1 through at least the end of the year.
The measures are expected to unlock nearly $3 billion in new export orders for Canadian farmers, fishers, and food processors, Carney said. He also noted that President Xi had committed to facilitating visa-free travel for Canadians to China, though details were not disclosed.
In a statement carried by China’s state-run Xinhua news agency, both countries pledged to resume high-level economic and financial dialogue, expand trade and investment, and deepen cooperation in agriculture, energy, and green technologies.
Carney said Canada plans to double the size of its energy grid over the next 15 years and sees opportunities for Chinese investment, including in offshore wind projects. He also reiterated Canada’s plan to scale up liquefied natural gas exports to Asia, aiming to produce 50 million tonnes annually by 2030, all destined for Asian markets.
Amid strained trade relations with the United States, Carney suggested that engagement with China had recently become more stable and results-oriented. “Our relationship with China has become more predictable, and we are seeing tangible outcomes,” he said when asked whether Beijing was currently a more reliable partner than Washington.
Analysts say the warming of Canada–China ties could influence the broader geopolitical and economic landscape, though Ottawa is unlikely to shift away from its long-standing alliance with the United States.
“Canada remains deeply embedded in US security and intelligence frameworks,” said Sun Chenghao, a fellow at Tsinghua University’s Centre for International Security and Strategy. “A strategic realignment away from Washington is highly unlikely.”
However, analysts noted that a more pragmatic Canadian economic approach toward China could provide Beijing with evidence that US-led economic decoupling is neither inevitable nor universally supported among America’s closest allies.
