The Canadian government under Prime Minister Mark Carney has struck a significant agreement with China, permitting a large number of Chinese electric vehicles to enter the Canadian market in exchange for eliminating duties on canola products. This deal represents the first trade agreement with another country since Carney assumed office and signifies a reduction in tensions with China, previously regarded as a disruptive force by the Canadian government. Carney hailed the agreement as a pivotal step to dismantle trade barriers and lower tariffs, forming part of a broader strategic alliance with China. The aim is to foster a partnership based on realism, respect, and mutual interests, as stated by Carney during a press briefing in Beijing.
As per the deal, Ottawa anticipates China to reduce canola seed duties to 15 percent by March, which Carney hailed as a substantial advancement. Consequently, Canadian canola meal, lobsters, crabs, and peas will be exempt from Chinese “anti-discrimination” tariffs from March through the end of the year. In return, Canada will allow up to 49,000 Chinese electric vehicles annually into the Canadian market at a 6.1 percent tariff, following the imposition of 100 percent tariffs on Chinese electric vehicles in 2024.
Saskatchewan Premier Scott Moe commended the reduction in canola tariffs, emphasizing the significance of collaborative efforts between federal and provincial governments and export industries in enhancing trade relationships. Carney defended the EV deal, asserting that it would enhance affordability for Canadians and constitute only a small portion of the domestic market. In contrast, Ontario Premier Doug Ford criticized the agreement, expressing concerns about the impact on Canadian workers and the auto sector.
Carney highlighted the potential for Chinese investment in Canada’s auto sector and stressed the importance of building a modern Canadian auto industry focused on advanced technology and affordability. The pact was finalized after Carney’s meeting with Chinese President Xi Jinping, marking the resolution of a longstanding trade dispute that originated from previous Canadian tariffs on Chinese electric vehicles. The deal also aligns with Canada’s trade objectives, aiming to increase non-U.S. exports and enhance trade with China by 2030.
Carney emphasized the discussion on human rights during his meeting with Xi, reiterating Canada’s commitment to values while adopting a pragmatic approach. The evolving relationship between Canada and China was described as more predictable compared to the relationship with the United States, fostering effective dialogue and outcomes. This development signifies a thaw in bilateral relations, particularly in the realm of trade, following years of strained interactions between Canada and China.
