The Canadian government, under Prime Minister Mark Carney, has struck an agreement with China to facilitate the entry of tens of thousands of Chinese electric vehicles into the Canadian market. In return, Canada will eliminate tariffs on canola products. This deal signifies a significant breakthrough in trade relations between the two countries and marks Carney’s first trade agreement since assuming office.
Describing the deal as a pivotal step in dismantling trade barriers and reducing tariffs, Carney emphasized the importance of establishing a strategic partnership with China that aligns with the current global landscape. Ottawa anticipates a substantial reduction in canola seed duties to 15 percent by March, which Carney hailed as a substantial advancement.
Furthermore, Canadian canola meal, lobsters, crabs, and peas will no longer be subjected to Chinese anti-discrimination tariffs from March onwards. In exchange, Canada will permit up to 49,000 Chinese electric vehicles annually into its market at a tariff rate of 6.1 percent. Carney highlighted that this move will enhance the affordability of electric vehicles for Canadians while constituting only a small portion of the domestic market.
Although Carney defended the deal as a return to pre-tariff levels seen in 2023, Ontario Premier Doug Ford criticized the agreement, expressing concerns about potential negative impacts on Canadian workers. Ford emphasized the need for balancing the deal by supporting Ontario’s auto sector and ensuring equitable investment opportunities.
The agreement comes following a meeting between Carney and Chinese President Xi Jinping, signaling a resolution to a longstanding trade dispute that originated from previous Canadian tariffs on electric vehicles. The deal reflects Canada’s commitment to double non-U.S. exports by 2030, including a 50 percent increase in exports to China.
Carney affirmed that human rights were discussed during the negotiations, underscoring Canada’s commitment to values-based realism in its foreign relations. He noted that the predictability and effectiveness of Canada’s relationship with China have improved significantly compared to its ties with the United States.
As Canada seeks to diversify its trade partnerships, Carney’s visit to China and upcoming engagements in Qatar and Switzerland aim to promote international trade and investment opportunities. The agreement signifies a warming of trade relations between Canada and China, paving the way for enhanced cooperation and economic benefits for both nations.