Canada PM announces $1 trillion trade & investment deals with China

Canadian Prime Minister Mark Carney said Canada and China have reached an initial trade agreement that will significantly reduce tariffs on electric vehicles and canola, marking a major step toward rebuilding bilateral economic ties.

Speaking to reporters in Beijing on Friday, Carney reaffirmed Canada’s commitment to strengthening cooperation with China through expanded trade, investment, and strategic partnerships. The visit is the first by a Canadian prime minister since 2017 and comes after months of diplomatic efforts to reset relations with Canada’s second-largest trading partner after the United States.

Under the agreement, Canada will allow up to 49,000 Chinese electric vehicles to enter the country at a tariff rate of 6.1% under most-favoured-nation terms. This represents a sharp rollback from the 100% tariff imposed in 2024 by former Prime Minister Justin Trudeau amid concerns over Chinese state subsidies. China exported more than 41,000 EVs to Canada in 2023.

“This is a return to pre-friction levels, but under an agreement that promises much more for Canadians,” Carney said, adding that cooperation with China would help Canada build a competitive domestic EV sector by accessing supply chains, technology, and investment.

Carney said the EV pact is expected to drive “considerable” Chinese investment into Canada’s auto industry, create jobs, and accelerate the country’s transition to a net-zero economy, including collaboration in clean energy storage and production.

The agreement also delivers significant relief for Canadian farmers. China is expected to reduce tariffs on Canadian canola seed to a combined rate of about 15% by March 1, down from current levels as high as 84%. Ottawa also anticipates the removal of discriminatory tariffs on canola meal, lobsters, crabs, and peas through at least the end of the year.

“These measures will unlock nearly $3 billion in new export orders for Canadian farmers, fish harvesters, and processors,” Carney said, noting that China represents a $4 billion annual market for Canadian canola seed.

China imposed tariffs on more than $2.6 billion worth of Canadian agricultural products last year in retaliation for Canada’s EV duties, contributing to a 10.4% drop in Chinese imports of Canadian goods in 2025.

Carney also said Chinese President Xi Jinping committed to visa-free travel for Canadians, though details have yet to be finalized. In a statement carried by China’s state media, both countries pledged to restart high-level economic and financial dialogue and expand cooperation in agriculture, oil and gas, green energy, and infrastructure.

Canada plans to double its energy grid capacity over the next 15 years and expand liquefied natural gas exports to Asia, producing up to 50 million tonnes annually by 2030 — opportunities Carney said could attract Chinese investment, including in offshore wind.

The renewed engagement comes as Canada faces trade tensions with the United States. Carney described recent dealings with China as “more predictable,” prompting debate over how the reset could influence broader geopolitical dynamics amid ongoing Sino-U.S. rivalry.