BY Rosemary
Canada has agreed to sharply reduce its punitive tariff on Chinese electric vehicles, breaking with the United States in exchange for significant cuts to Chinese duties on Canadian agricultural exports, Prime Minister Mark Carney announced Friday following high-level talks in Beijing.
Under the agreement, Canada will roll back its 100% tariff on Chinese-made electric cars and replace it with a capped import system. Chinese automakers will initially be allowed to export up to 49,000 electric vehicles to Canada, with the quota gradually increasing to 70,000 vehicles over the next five years. In return, China will slash its tariff on Canadian canola seeds, one of Canada’s most important farm exports, from roughly 84% to about 15%.
Carney described the agreement as a major reset after years of strained relations. Speaking outdoors at a Beijing park after two days of meetings with senior Chinese officials, he said the talks had produced tangible results at a time of mounting global trade tensions.
“It has been a historic and productive two days,” Carney said. “We need to recognize where Canada’s interests differ from those of other countries and focus on practical cooperation where our priorities align.”
Earlier in the day, Carney met with Chinese President Xi Jinping, with both leaders signaling a desire to stabilize and improve bilateral relations after a prolonged period of diplomatic and economic friction. Xi told Carney that discussions aimed at restoring cooperation had been ongoing since their first meeting last October on the sidelines of a regional economic summit in South Korea.
“Our meeting last year opened a new chapter in moving China–Canada relations toward improvement,” Xi said, according to remarks released after the talks. He added that Beijing was prepared to continue working with Ottawa to deepen engagement.
Carney is the first Canadian prime minister to visit China in eight years. He said improving ties with Beijing could help strengthen what he described as a global governance system under increasing strain, as trade disputes and geopolitical rivalries intensify. He called for a relationship adapted to “new global realities,” highlighting opportunities for cooperation in agriculture, energy and finance.
Those realities are closely tied to the trade policies of U.S. President Donald Trump, whose aggressive tariff strategy has disrupted global markets and strained relations with both allies and rivals. The levies imposed by Washington have weighed heavily on the Canadian and Chinese economies alike. Ahead of his trip, Carney said his government was seeking to reduce Canada’s reliance on the U.S. market amid what he called a period of global trade disruption.
During his stay in Beijing, Carney also met with executives from major Chinese companies. Canadian business leaders operating in China welcomed the visit, saying it reopened lines of communication that had been frozen for years. Jacob Cooke, chief executive of WPIC Marketing + Technologies, which helps foreign companies enter the Chinese market, called the visit transformative.
“For a long time, there was no dialogue, no respect and no framework,” Cooke said. “This changes that.”
Canada’s previous government had closely aligned itself with Washington on trade policy. Under former Prime Minister Justin Trudeau, Ottawa imposed a 100% tariff on Chinese electric vehicles and 25% duties on Chinese steel and aluminum, mirroring U.S. measures. Beijing retaliated with steep tariffs on Canadian exports, including 100% duties on canola oil and meal, 25% on pork and seafood, and an additional 75.8% tariff on canola seeds imposed last August.
Those measures effectively shut Canadian canola out of the Chinese market, according to industry groups, delivering a heavy blow to farmers. Chinese customs data show that China’s imports from Canada fell 10.4% last year to $41.7 billion.
China has signaled that it hopes trade pressure from Washington will encourage U.S. allies such as Canada to pursue more independent foreign policies. Trump has repeatedly floated the idea of Canada becoming America’s 51st state, comments that have drawn sharp rebukes from Canadian leaders.
Carney is scheduled to depart China on Saturday before traveling to Qatar on Sunday. His office said he will meet with business leaders and investors there to promote trade and investment, before heading to Switzerland next week for the annual World Economic Forum meeting in Davos.
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