The Canadian government has struck a trade deal with China, permitting a significant number of Chinese electric vehicles to enter the Canadian market in exchange for the elimination of tariffs on canola products, announced Prime Minister Mark Carney on Friday. This agreement marks Carney’s first trade deal with another country since assuming office and signifies a reduction in tensions with China, a nation previously viewed as disruptive by the Liberal government.
Carney hailed the deal as a significant step towards dismantling trade barriers and cutting tariffs, forming part of a broader strategic partnership with China. The Prime Minister emphasized the realistic and respectful engagement that characterized the agreement, describing it as a “preliminary but landmark” deal during a press conference in Beijing.
Under the terms of the agreement, Beijing is expected to reduce canola seed duties to 15 per cent by March, a move Carney praised as substantial progress. In return, Canada will permit up to 49,000 Chinese electric vehicles into the Canadian market annually at a 6.1 per cent tariff, easing restrictions that were previously imposed.
Saskatchewan Premier Scott Moe expressed approval for the reduction in canola tariffs, highlighting the importance of collaborative efforts between federal and provincial governments and export industries to strengthen trade relationships. The deal exempts Canadian canola meal, lobsters, crabs, and peas from Chinese anti-discrimination tariffs until the end of the year, with no mention of canola oil.
Carney defended the EV market access granted to China as a return to levels seen in 2023 before the imposition of Canadian tariffs in 2024. He emphasized that this move will enhance affordability for Canadian consumers and only represent a small portion of the domestic market, approximately three per cent.
However, Ontario Premier Doug Ford criticized the EV deal, expressing concerns about the potential negative impact on Canadian workers. Ford argued that the agreement may disadvantage Canadian automakers in the American market and urged Carney to prioritize support for Ontario’s auto sector.
The trade pact follows a meeting between Carney and Chinese President Xi Jinping, resolving a longstanding trade dispute that originated from previous Canadian tariffs on Chinese electric vehicles. The deal aligns with the Liberal government’s goal to increase non-U.S. exports by 2030, including a significant boost in trade with China.
Carney emphasized that discussions with China also encompass human rights concerns, emphasizing Canada’s commitment to values like democracy and human rights. The Prime Minister highlighted the evolving and more predictable nature of Canada’s relationship with China in comparison to its ties with the United States, citing a candid and consistent dialogue that has fostered a productive partnership.
As Carney departed China to attend the World Economic Forum in Switzerland, U.S. President Donald Trump praised the trade deal with China, acknowledging its significance. The agreement reflects a thaw in Canada-China relations, particularly in the realm of trade, following years of strained interactions.
The recent trade agreement signals a positive shift in Canada-China relations, with both countries committed to resolving trade disputes and fostering a more collaborative economic partnership.
