China and Canada Ease Tariffs Following High-Level Carney–Xi Talks
Chinese President Xi Jinping and Canadian Prime Minister Mark Carney agreed to reduce tariffs, indicating a fresh start in bilateral ties following an important meeting in Beijing.
Carney told reporters that China is expected to reduce its tariff on Canadian canola oil from 85% to 15% by March 1, while Ottawa has agreed to impose a most-favored-nation rate of 6.1% on Chinese electric vehicles.
The deal is a breakthrough after years of strained relations and tit-for-tat tariffs. Xi praised the “transformation” in their relationship, but it is also a win for Carney, who is the first Canadian leader to visit China in nearly a decade.
He has been trying to diversify Canadian trade away from the United States, his country’s largest trading partner, following the uncertainty caused by Trump’s reimposed tariffs.
The deal could also see more Chinese investment in Canada, which is on America’s doorstep.
Carney himself seemed to be referring to the fact that this was the result of Trump’s tariffs, which have now pushed one of America’s key allies towards its biggest rival.
He told reporters that Canada’s relationship with China has been more “predictable” in recent months and that he found the talks with Beijing “realistic and respectful.”
He also made it clear that Ottawa does not agree with Beijing on everything, adding that in his discussions with Xi he made clear Canada’s “red lines,” including human rights, concerns about election interference, and the need for “guardrails.”
“We take the world as it is—not as we want it to be,” he said when asked about China’s human rights record.
Observers believe Carney’s visit could set an example for other countries around the world that are feeling the pain of Washington’s tariffs.
In contrast, Xi is trying to project China as a stable global partner and is emphasizing more pragmatic relationships—a “win-win” for all, in Beijing’s words.
And it seems to be working. In recent weeks, both the South Korean president and the Irish prime minister have visited Beijing. The UK prime minister and the German chancellor are also expected to visit soon.
Carney said that “the world has changed dramatically,” and how Canada positions itself will “determine our future for decades to come.”
Earlier in his three-day visit, he had said that the Canada-China partnership prepares both countries for a “new world order.” He later added that the multilateral system is “broken, to put it mildly, or weakened.”
On Friday, as the Chinese and Canadian delegations sat in the Great Hall of the People, Xi said, “The healthy and stable development of China-Canada relations is good for peace, stability, development, and prosperity in the world.”
A reset in trade relations
Tariffs have been a major point of contention between the two sides. In 2024, Canada, like the US, imposed a 100% tariff on Chinese electric vehicles.
Last year, Beijing retaliated by imposing tariffs of more than $2 billion (£1.5 billion) on Canadian agricultural and food products, such as canola seeds and oil. This resulted in a 10% decrease in Chinese imports of Canadian goods in 2025.
In the deal struck on Friday, Canada will allow only 49,000 Chinese electric vehicles into the Canadian market at a 6.1% tariff rate. This limit was imposed in response to fears among Canadian automakers about the influx of cheaper Chinese EVs.
In addition to relief for canola producers, tariffs will also be reduced on Canadian lobster, crab, and peas. China is Canada’s second-largest trading partner, but in terms of volume, it still lags far behind the US.
Economic relations with China are becoming increasingly important for Carney. Upon arriving in Beijing on Wednesday, he met with senior executives from major Chinese companies, including an electric vehicle battery manufacturer and a large energy company.
On Thursday, the two countries signed several agreements on energy and trade cooperation.
Colin Robertson, vice-president of the Canadian Global Affairs Institute and a former Canadian diplomat, said the visit was about “resetting the relationship,” which might be “modest in ambition” but “more realistic about what we can actually achieve.”
A history marked by cold relations
The last Canadian PM to visit China was Justin Trudeau, who met with Xi in Beijing in 2017.
That visit preceded a deterioration in relations in 2018, when Canada, at the behest of the US, arrested Meng Wanzhou, the chief financial officer of Chinese tech company Huawei.
Days later, China detained Canadian citizens Michael Kovrig and Michael Spavor on espionage charges—a move critics considered retaliation for Meng’s arrest, which China denied. Meng and both Michaels were released in 2021.
Ahead of the Carney-Xi meeting, Michael Kovrig wrote on X that the visit shouldn’t just be about improving relations but also about “managing leverage.”
Kovrig described Chinese negotiators as “very smart, calculating, and always looking for leverage.”
“Therefore, negotiations must be handled with discipline,” he wrote, adding that Carney should also advocate for Canadians imprisoned in China, whom Canadian media reports number around 100.
Speaking to reporters, Carney made it clear that Ottawa would engage with countries that don’t share its values in a “more targeted, more specific” way.
“We’re very clear about where we cooperate and where we disagree,” he said, adding that there was “significant discussion” on Chinese claims over self-governing Taiwan and on Jimmy Lai, the pro-democracy advocate imprisoned in Hong Kong.
He said Canada and China have “different systems,” which limits the scope of their cooperation.
“But to have a good relationship, we have direct conversations. We don’t conduct diplomacy through a megaphone.”
