Ottawa: Canada has announced a new trade agreement with China valued at more than USD 7 billion, marking a significant step in Ottawa’s push to broaden its global trade ties amid growing uncertainty in international markets.
Prime Minister Mark Carney revealed the deal on social media, saying the agreement would create fresh opportunities for Canadian exporters and workers by opening access to new markets. He described the pact as a major boost for domestic businesses seeking growth beyond traditional trading partners.
In a separate statement, the Prime Minister’s Office said the agreement aligns with Canada’s broader goal of strengthening economic independence. The statement noted that, as global trade becomes increasingly fragmented, the government is prioritising diversification and investment, adding that China’s position as the world’s second-largest economy makes it a key partner in this effort.
High-Level Talks in Beijing
The agreement follows Carney’s visit to Beijing earlier this week, his first trip to China since taking office and the first by a Canadian prime minister since 2017. During the visit, Carney held talks with Chinese President Xi Jinping, Premier Li Qiang and senior legislator Zhao Leji.
After the meetings, both sides issued a joint statement outlining the framework of a renewed Canada–China strategic partnership, signalling an intent to stabilise and expand economic cooperation.
Tariff Adjustments and Market Access
As part of the deal, Canada has agreed to roll back its 100 per cent tariff on Chinese electric vehicles in exchange for reduced duties on Canadian agricultural exports. According to reports, Chinese electric vehicle shipments to Canada will initially be capped at 49,000 units annually, with the limit expected to rise to around 70,000 over the next five years.
China, in return, will significantly lower tariffs on Canadian canola seed — one of Canada’s key exports — cutting duties from about 84 per cent to roughly 15 per cent.
Context of Global Trade Tensions
Speaking about the broader trade environment, Carney suggested that Canada’s recent engagement with China has yielded clearer outcomes compared to dealings with the United States. Canada currently faces steep levies on its exports, including a 35 per cent duty on several goods, a 50 per cent charge on imported metals and a 25 per cent tariff on vehicles produced outside the US.
The announcement comes against the backdrop of ongoing trade friction between Washington and Beijing. While both sides had previously threatened tariffs as high as 100 per cent on certain goods, some duties were temporarily eased following recent talks between US President Donald Trump and President Xi, with exemptions extended on select Chinese products until November 2026.
Canada’s new agreement with China underscores a strategic recalibration as Ottawa seeks to shield its economy from geopolitical volatility by expanding its trade footprint.
