Canadian Prime Minister Mark Carney concluded a historic visit to China on Friday, sealing a preliminary trade agreement and a broader strategic partnership with Chinese leaders in a bid to reset bilateral economic relations and diversify Canada’s trade beyond its traditional dependence on the United States.
The visit — Carney’s first to China since 2017 — culminated in discussions with President Xi Jinping and Premier Li Qiang, where both sides announced a “new strategic partnership” covering energy, trade, agriculture, finance, public safety, and cultural exchanges. Carney described the deal as a realistic response to shifting global economic dynamics and “the world as it is today.”
“We’re recalibrating Canada’s relationship with China strategically, pragmatically, and decisively — to the benefit of the people of both our nations,” Carney reiterated on social media.
At the centre of the trade agreement is a tariff-quota arrangement that would see Canada reduce its tariff on Chinese electric vehicles — previously set at 100 % — to a 6.1 % most-favoured-nation rate. Under the deal, Canada will allow up to 49,000 Chinese EVs into its market annually, a figure Ottawa says represents roughly 3 % of annual new vehicle sales and includes provisions to increase affordability for Canadian buyers over time.
In exchange, China has agreed to significantly reduce tariffs on key Canadian agricultural exports, particularly canola seed — expected to drop to about 15 % by March 1 — and to remove discriminatory duties on products such as canola meal, lobster, crab, and peas through the end of the year.
Canola producers, long hit hard by Beijing’s retaliatory tariffs following earlier Canadian duties on Chinese EVs and steel, welcomed the progress as a major breakthrough after years of trade friction.
Beyond trade barriers, Canada and China signed multiple memorandums of understanding spanning energy cooperation — including joint work on clean and conventional energy technologies — forestry, food safety, cultural exchange, and crime prevention. Regular ministerial-level energy dialogues will be established to deepen cooperation in low-carbon sectors and conventional energy markets.
“We’ve secured a new trade agreement with China — unlocking more than $7 billion in export markets for Canadian workers and businesses,” Canada’s Prime Minister stated on his socials.
The partnership also includes commitments to enhance cooperation on public safety, narcotics trafficking, cybercrime, and people-to-people ties such as tourism, education, and cultural programs, signalling a wide-ranging diplomatic reset.
Carney’s visit reflects a strategic effort by Ottawa to reduce Canada’s heavy reliance on the U.S. market — which still accounts for the vast majority of Canadian exports — by boosting ties with China, Canada’s second-largest trading partner. Analysts say the move underscores a pragmatic pivot amid rising global trade tensions and protectionist policies from Washington.
However, the decision has drawn both support and criticism domestically. Proponents argue the deal will open new opportunities for Canadian farmers and manufacturers, while critics warn it could expose Canadian industries to heightened foreign competition and complicate relations with the United States.
Carney has set ambitious targets to increase Canadian exports to China by 50 % by 2030, and the two countries plan to maintain close engagement, including additional high-level meetings such as the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit later in the year.
The preliminary nature of the tariff-quota deal means further negotiations and legislative steps will be needed before all provisions take effect. Still, the agreement represents a significant thaw in relations that had been strained by trade disputes and geopolitical tensions in recent years.
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