Canada and China Strike Initial Trade Deal That Will Slash Tariffs On Electric Vehicles And Canola

BEIJING, January 16 (Reuters) – Canada And Chinese Prime Minister Mark Carney said on Friday they had reached an initial trade deal that would reduce tariffs on electric vehicles and canola, after both countries pledged to remove trade barriers while forging new strategic ties.

First Canadian prime minister to visit Canada Chinese Carney has been trying to rebuild ties with his country’s second-largest trading partner after the United States since 2017, following months of diplomatic efforts.

Canada After a meeting with Chinese leaders including President Xi Jinping, Carney said he would initially allow up to 49,000 Chinese electric vehicles at a 6.1 percent tariff on most-favored country terms. He did not specify a time period.

This compares with a 100% tariff on Chinese electric vehicles imposed by former Prime Minister Justin Trudeau’s government in 2024, following similar penalties by the United States. in 2023 Chinese Exported 41,678 EVs Canada.

“This is a return to the levels before the recent trade frictions, but under a deal that promises much more for Canadians,” Carney told reporters.

Trudeau justified his tariff on the grounds that it was an unfair global market advantage for Chinese manufacturers who benefit from government subsidies, a scenario that threatens domestic producers.

“For Canada To build our own competitive EV sector, we will need to learn from innovative partners, access their supply chains and increase local demand,” Carney said.

He pointed to a stronger partnership with Chinese It encourages new investments in clean energy storage and production.

Carney said he expected the EV deal would attract a “significant amount” of Chinese investment to China. CanadaCreate good careers in the automotive industry and accelerate it towards a net zero future.

Doug Ford, Premier of Ontario, Canada‘s main automobile manufacturing province filed a complaint Chinese He now had a foothold in Canada and would take full advantage of it.

“The federal government is inviting an influx of cheap manufactured products.Chinese electric vehicles with no guarantee of equal or immediate investment Canada‘s economy, automotive industry or supply chain,” he said in a post on X.

In retaliation for Trudeau’s tariffs last March, Chinese In August, it imposed tariffs on more than $2.6 billion in Canadian farm and food products such as canola oil and meal, and later imposed tariffs on canola seed.

This led to a decrease of 10.4 percent Chinese2025 Canadian imports.

Regarding the new agreement, Carney said: Canada waiting Chinese It will reduce tariffs on canola seed to a total of approximately 15% by March 1.

“This change represents a significant reduction from the current combined tariff levels of 84%,” he said. Chinese It was a $4 billion canola seed market Canada.

Canada He also added that he expects anti-discrimination tariffs on canola meal, lobster, crab and peas to be eliminated on March 1 by at least the end of the year.

Carney said the deals would unlock about $3 billion in export orders for Canadian farmers, fish harvesters and processors.

He also noted that Xi has committed to ensuring visa-free access for Canadians traveling to Canada. Chinesebut did not give details.

In the statement made by ChineseThe two countries pledged to restart high-level economic and financial dialogue, increase trade and investment and strengthen cooperation in agriculture, oil, gas and green energy, according to the state-run Xinhua news agency.

carney said Canada He added that there are opportunities for Chinese partnerships to double the energy network in the next 15 years and in investments including offshore wind.

And he said Canada It is increasing LNG exports to Asia and will produce 50 million tons of LNG every year; all of which will be shipped to Asian markets by 2030.

“Given the current complexities Canada“Given its trade relations with the United States, it is no surprise that the Carney government is eager to improve bilateral trade and investment relations with Beijing, which represents a large market for Canadian farmers,” Beijing-based Trivium said. ChineseEven Rogers Pay.

“Meanwhile, it’s hard for Washington to criticize Carney for reaching a beneficial trade deal when Trump himself did so in October.”

US President Donald Trump also imposed tariffs on some Canadian goods and suggested that Canada, a long-time US ally, could become his country’s 51st state.

ChineseSimilarly affected by Trump’s tariffs, the US is willing to cooperate with the Seven Countries in the US’s traditional sphere of influence.

“In terms of the way our relationship has progressed in recent months Chineseit’s more predictable and you see the results that come from that,” Carney said. Chinese It was a more predictable and reliable partner than the US

Carney also said he met with Xi on the following issues: Greenland. “I found a lot of agreement on this issue,” he said.

Trump has revived his claim over the semi-autonomous Danish territory in recent days, at a time when NATO members are trying to counter US criticism that Greenland is not adequately protected.

Analysts say the rapprochement could reshape the political and economic context in which the Sino-U.S. rivalry emerges, but Ottawa is not expected to move dramatically away from Washington.

“Canada “It is one of the US’s core allies and is deeply committed to American security and intelligence frameworks,” said Sun Chenghao of Tsinghua University’s Center for International Security and Strategy.

“Therefore, strategically moving away from Washington is unlikely.”

But if Ottawa pursues a more pragmatic and autonomous economic policy ChineseHe added that Beijing could point to this as evidence that a US-led split is neither inevitable nor universally accepted among America’s closest partners.

(Reporting by Maria Cheng; Additional reporting by Joe Cash, Ethan Wang, Ella Cao, Xiuhao Chen, Shi Bu, Yukun Zhang and Liz Lee in Beijing and David Ljunggren in Ottawa; Writing by Ryan Woo; Editing by Himani Sarkar, Clarence Fernandez, Hugh Lawson and Nia Williams)