The Canadian government, under the leadership of Prime Minister Mark Carney, has finalized a significant agreement with China, deemed a pivotal milestone. The Prime Minister described the partnership as a reflection of the current global landscape, characterized by a practical, respectful, and interest-driven engagement, during a press briefing in Beijing.
After a decade marked by strained relations between the two nations, the agreement entails adjustments to tariffs on specific goods. Notably, Canada has consented to allow 49,000 Chinese electric vehicles into its market with a tariff rate of 6.1%, a modification from the previous 100% tariff imposed on all Chinese EVs in 2024. In return, China is expected to reduce tariffs on Canadian canola to 15% by March and eliminate tariffs on Canadian canola meal, lobsters, crab, and peas until at least the end of 2026.
While progress has been made to address issues concerning Canadian pork exports, tariffs on pork from Canada remain intact, as per sources familiar with the matter. The Prime Minister, succeeding Justin Trudeau in March 2025, engaged with Chinese President Xi Jinping at the Asia Pacific Economic Co-operation summit in South Korea in October, marking their first official meeting since 2017. Carney hailed this interaction as a significant turning point in Canada-China relations, emphasizing the necessity of fostering new alliances amidst global trade transformations.
Attention is now focused on the White House’s response following the Canada-China agreement, especially with the upcoming review of the Canada-U.S.-Mexico Agreement (CUSMA). Despite initial concerns about the deal potentially affecting North American markets, former U.S. President Trump has shown support for the agreement, acknowledging its benefits. However, U.S. Trade Representative Jamieson Greer expressed reservations regarding the deal, citing potential repercussions for Canada.
Reactions from Canadian provincial leaders have varied, with some, like Saskatchewan Premier Scott Moe, viewing the deal positively, particularly in the context of the agriculture industry. Conversely, Ontario Premier Doug Ford criticized the agreement, highlighting concerns about the impact on the auto sector. The deal has elicited contrasting responses from industry stakeholders, with the agricultural sector welcoming the agreement while the auto industry raises apprehensions about the risks involved.