China, Canada announce tariff relief after high-level meeting

Chinese President Xi Jinping and Canadian Prime Minister Mark Carney announced tariff cuts after a major meeting in Beijing, signaling a reset in relations between the two countries.

China is expected to lower its levy on Canadian canola oil from 85% to 15% by March 1, and Ottawa has agreed to tax Chinese electric vehicles at the MFN rate of 6.1%, Carney told reporters.

The deal was a landmark development after years of strained relations and fines. While Xi welcomed the “turn” in relations between the two countries, it was also a victory for Carney, the Canadian leader’s first visit to China in nearly a decade.

He has been trying to diversify Canada’s trade away from the United States, its largest trading partner, amid uncertainty over Trump’s repeated tariffs.

The deal could lead to more Chinese investment in Canada, right on America’s doorstep.

Carney himself seemed to imply that this was the result of Trump’s tariffs relegating one of America’s key allies to its biggest rival.

He told reporters that Canada’s relationship with China has become more “predictable” in recent months and that he believes talks with Beijing are “realistic and respectful.”

He also made clear that Ottawa disagrees with Beijing on everything, adding that Canada’s “red lines” were clear in its discussions with Xi Jinping, including human rights, concerns about election interference and the need for “guardrails.”

Asked about China’s human rights record, he said, “We accept the world as it is, not as we want it to be.”

Observers believe Carney’s visit could serve as an example for other countries around the world suffering from Washington’s tariffs.

By contrast, Xi has sought to show China as a stable global partner and has called for a more pragmatic relationship that is, in Beijing’s words, a “win-win” for all.

And it seems to be working. The President of South Korea and the Prime Minister of Ireland have visited Beijing in recent weeks. The British and German prime ministers are also scheduled to visit soon.

“The world has changed dramatically,” Carney said, adding, “Canada’s place will shape our future for decades to come.”

Ahead of his three-day visit, he said Canada’s partnership with China positions the two countries as a foundation for a “new world order.” He later added that the multilateral system had been “eroded or weakened, to put it politely.”

“The sound and stable development of China-Canada relations is conducive to world peace, stability, development and prosperity,” Xi said as Chinese and Canadian delegations sat in the Great Hall of the People on Friday.

Tariffs have been a major sticking point between the two sides.

In 2024, Canada imposed a 100% tariff on Chinese electric vehicles, following similar regulations in the United States.

Last year, China retaliated by imposing tariffs on more than $2 billion (1.5 billion pounds) worth of Canadian agricultural products and foods including canola seed and oil. As a result, China’s imports of Canadian goods will decline by 10% in 2025.

Under the agreement signed Friday, Canada will only allow 49,000 Chinese electric vehicles into the Canadian market with a tariff of 6.1 per cent.

The limit is a response to Canadian automakers’ fears about an influx of cheap Chinese EVs.

In addition to relief for canola producers, tariffs on Canadian lobster, crab and peas will also be reduced.

China is Canada’s second-largest trading partner, but still lags behind the United States in size.

For Carney, economic ties with China are becoming increasingly important. Upon arriving in Beijing on Wednesday, he met with senior executives from prominent Chinese companies, including an electric vehicle battery maker and an energy conglomerate.

On Thursday, the two countries signed several agreements on energy and trade cooperation.

The visit may be “moderately ambitious,” but it is “a reset of the relationship” that is “much more realistic about what we can reasonably achieve,” said Colin Robertson, a former Canadian diplomat and vice-president of the Canadian Institute of Global Affairs.

The last Canadian prime minister to visit China was Justin Trudeau, who met with President Xi in Beijing in 2017.

The visit came before relations soured after Canada arrested Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei, in 2018 at the request of the United States.

Days later, China detained Canadian citizens Michael Kovrig and Michael Spavor on espionage charges. Critics saw the move as retaliation for Meng’s arrest, which China denies.

Both Meng and Michaels were released in 2021.

Ahead of the Carney-Xi meeting, Michael Kovrig wrote to X that the visit should be about “leverage management” and not just about warming relations.

Kovrig described Chinese negotiators as “very skillful and calculating, always looking for leverage.”

“So inclusion must be done with discipline,” he wrote, adding that Carney must advocate for Canadians imprisoned in China. There are about 100 of them, according to The Canadian Press.

Speaking to reporters, Carney made it clear that Ottawa would engage in a “narrower and more specific” way with countries that do not share the same values.

“We are very clear where we cooperate and where we differ,” he said, adding that China’s claims against autonomous Taiwan and Hong Kong’s jailed pro-democracy figure Jimmy Lai emerged from “extensive discussions.”

Canada and China have “different systems,” which limits the scope for cooperation, he said.

“But to have an effective relationship, you have to have a direct conversation. You don’t do that with a megaphone.”