Carney reaches ‘preliminary but landmark’ China deal on tariffs, quotas – National

Prime Minister Mark Carney announced a new trade deal with China focused on electric vehicles and canola at the conclusion of a high-profile visit, touting a renewed relationship and progress on trade irritants. The agreement has drawn mixed reactions domestically, with concerns raised by Ontario and the auto sector, while Prairie premiers and farm groups welcomed the reduced tariffs on agricultural products.

Deal Marks Shift in Canada-China Relations

The deal, revealed after Carney’s meeting with President Xi Jinping in Beijing, represents a de-escalation in tensions with a country the Canadian government previously labeled a disruptive global power. Carney distanced himself from that earlier characterization, stating he was not part of the government that used the term in Canada’s 2022 Indo-Pacific strategy.

“Our relationship has progressed in recent months with China,” Carney said, highlighting numerous discussions with both Xi and Premier Li Qiang over the past 10 months. “It is more predictable and you see results coming from that.”

Agreements on energy, forestry products, and pet food were announced on the first day of Carney’s visit, followed Friday by a resolution to a trade dispute that began in 2024. Canada had accused China of unfairly subsidizing and dumping electric vehicles, imposing 100 per cent tariffs in response.

China retaliated in March 2025 with 100 per cent tariffs on Canadian canola oil, peas, and other products, alongside 25 per cent tariffs on pork and seafood, later adding canola seed to the list.

Under the new agreement, Canada will allow up to 49,000 Chinese electric vehicles into the country at a “most favoured nation tariff rate” of 6.1 per cent. Half of those vehicles must cost less than $35,000 by 2030, intended to increase affordability for Canadian consumers.

In return, Ottawa expects Beijing to reduce canola seed duties to 15 per cent from 84 per cent by March 1. Canadian canola meal, lobsters, crabs, and peas will no longer be subject to Chinese “anti-discrimination” tariffs from March to at least the end of the year. However, no changes were made to the 100 per cent tariff on canola oil or the 25 per cent tariff on Canadian pork.

Ontario Premier Doug Ford criticized the deal, warning it could give China a foothold in the Canadian auto market at the expense of Canadian workers. Conservative Leader Pierre Poilievre questioned whether China’s retaliatory tariffs would be permanently eliminated.

Saskatchewan Premier Scott Moe, who accompanied Carney on the trip, called the deal “very good news for Canada and Saskatchewan.” Alberta Premier Danielle Smith welcomed the reduction of Chinese tariffs on canola and peas and expressed hope for similar cuts on pork and other products.

Carney described the agreement as a “new partnership, a new era,” part of a broader strategic partnership that includes boosting tourism and cultural ties. He noted Xi’s commitment to visa-free travel for Canadians visiting China.

“It’s a partnership that reflects the world as it is today, with an engagement that is realistic, respectful and interest-based,” he said.

Canada’s move to strengthen ties with China comes amid increasing strain in its relationship with the United States. While some U.S. officials expressed concern about increased Chinese vehicle imports, former President Donald Trump appeared unconcerned, stating, “That’s what he should be doing. It’s a good thing for him to sign a trade deal.”

Carney also raised human rights concerns during his meeting with Xi, emphasizing Canada’s commitment to “value-based realism.” He stated that Canada will continue to advocate for human rights, democracy, and territorial integrity while acknowledging the current global landscape.

Carney is scheduled to return to China in November for the APEC summit in Shenzhen.