Prime Minister Mark Carney visited Beijing this week and reached an initial trade deal with China on electric vehicles and canola. The agreement aims to ease trade barriers between the two countries. It comes as Canada seeks new partners amid tensions with the United States. Carney met with Chinese President Xi Jinping to discuss energy, clean technology, and farm exports.
Background
Canada and China have traded goods for years, with China as Canada's second-largest trading partner. In 2024, two-way trade hit $118.9 billion, including $30 billion in Canadian exports. Farm products like canola, forest goods, and seafood made up $13.4 billion of those sales. But past disputes raised tariffs and blocked some exports. Canola seed duties from China reached about 85%, hurting Canadian farmers who rely on that $4 billion market.
Relations cooled over trade frictions and other issues in recent years. This changed with Carney's first official trip to China. He aimed to rebuild ties and open doors for workers and businesses. The visit builds on talks from the past year that started to fix old problems. Both sides want to grow trade in energy, tech, and food. They also share goals on climate and global rules. Canada plans to boost exports to China by 50% by 2030.
Carney's trip marks a shift. Canada faces uncertainty with its southern neighbor under new leadership. Leaders in Ottawa see China as a key player for energy and clean growth. Meetings with business heads in Beijing focused on investments in batteries, solar, wind, and storage. New pacts cover energy cooperation, crime fighting, culture, wood products, and food safety.
Key Details
The deal has clear steps on vehicles and farm goods. Canada will let in up to 49,000 Chinese electric vehicles each year at a 6.1% tariff, the most-favoured-nation rate. This matches volumes from before recent trade issues, about 3% of Canada's new car market. Over three years, it should bring joint-venture factories to Canada, creating auto jobs and building local supply chains for EV parts.
In five years, more than half of these vehicles could cost under $35,000, giving Canadians cheaper green options. The EV move ties into bigger plans for clean tech. Both countries are energy giants pushing low emissions and new investments.
Agri-Food Wins
China agreed to cut canola seed tariffs to around 15% by March 1, 2026, from 85% now. Canadian canola meal, lobsters, crabs, and peas will dodge anti-discrimination duties from that date through year's end. These changes could unlock $3 billion in exports to China's 1.4 billion people.
The pact also eyes fixes for other farm sectors like beef and pet food. It renews a base of the Canada-China link, with agri-food as a cornerstone.
“At its best, the Canada-China relationship has created massive opportunities for both our peoples. By leveraging our strengths and focusing on trade, energy, agri-food, and areas where we can make huge gains, we are forging a new strategic partnership that builds on the best of our past, reflects the world as it is today, and benefits the people of both our nations.”
— The Rt. Hon. Mark Carney, Prime Minister of Canada
New memorandums strengthen ties in key areas. They aim to speed the shift to low-carbon economies, draw investments, and make high-pay jobs. Canada expects progress on long-blocked trade paths.
What This Means
For Canadian workers, the deal promises factory jobs from Chinese firms setting up EV plants. Farmers stand to gain from open markets, with canola exports flowing freer and tariffs lower. Consumers get access to affordable electric cars sooner, aiding the push to cut emissions.
Businesses in energy and tech see doors open for two-way deals. Canada's EV supply chain grows with partner investments, protecting local careers while importing vehicles. Agri exporters tap a huge market, boosting orders worth billions.
On the world stage, the pact signals closer work on climate and trade rules. Canada backs China's 2026 APEC role; China supports Canada's 2029 bid. This fits broader goals for stable finance and multilateral talks.
The agreement sets a path for more growth. Officials expect it to resolve old hurdles in farm trade and spark investments across sectors. Two nations commit to doubling down on strengths like clean energy and food. As ties warm, Canada positions itself for steady trade amid global changes. Leaders from both sides call it a turnaround, with real gains for people on the ground.
Carney's Beijing meetings wrapped with promises of follow-through. Teams will work to hit timelines on tariffs and quotas. Joint ventures could start soon, bringing cash and jobs home. Farm groups watch for March changes that ease paths to shelves in China. Auto makers eye the EV quota as a test for bigger plays. The deal tests if reset relations hold through talks ahead.
