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PULSE POINTS
❓WHAT HAPPENED: Canadian Prime Minister Mark Carney and Chinese President Xi Jinping have agreed to a major trade deal, which could flood the Canadian market with Chinese electric vehicles, while reducing tariffs on Canadian goods exported to China.
👤WHO WAS INVOLVED: Prime Minister Mark Carney, President Xi Jinping, Ontario Premier Doug Ford, and Canadian farmers.
📍WHEN & WHERE: The preliminary deal was announced on January 16, following talks between Carney and Xi in Beijing.
💬KEY QUOTE: “Make no mistake: China now has a foothold in the Canadian market and will use it to their full advantage at the expense of Canadian workers.” – Doug Ford.
🎯IMPACT: The agreement is a major reset of Canadian-Chinese relations and could further complicate a potential Canadian trade deal with the United States.
IN FULL
Canada is moving to deepen economic ties with Communist China after fumbling trade negotiations with the United States late last year, marking a notable shift in Ottawa’s foreign and trade policy. During a visit to Beijing this week, Prime Minister Mark Carney announced a preliminary trade agreement with China that lowers barriers on both sides.
Under the deal, Canada will allow China to flood the Canadian market with up to 49,000 Chinese-made electric vehicles each year at a tariff of 6.1 per cent, a huge reduction from the 100 per cent duty previously imposed. In exchange, China will reduce tariffs on Canadian agricultural exports, including canola seed oil, which will fall to about 15 per cent by March, down from levels exceeding 80 per cent. Duties on canola meal, lobster, crab, and peas will also be lifted for the remainder of the year.
Carney claimed the agreement is a pragmatic step to support Canadian farmers and consumers while diversifying the country’s trade relationships. He said the deal would help restore access to a key export market for agriculture and could make lower-cost electric vehicles more available to Canadians.
However, the agreement comes as Canada’s economic relationship with the United States has grown increasingly unstable. Last year, Carney and Trump held talks at the White House that appeared to bring the two countries closer to a new trade deal, with both sides publicly expressing optimism. However, those discussions later broke down. In October, Trump abruptly halted trade negotiations with Canada, citing anger over a provincial anti-tariff advertising campaign in Ontario produced and paid for by Premier Doug Ford that targeted U.S. trade measures using edited, misleading footage of former President Ronald Reagan. Trump accused Canada of acting in bad faith.
Ford also commented on the new China deal, saying, “Make no mistake: China now has a foothold in the Canadian market and will use it to their full advantage at the expense of Canadian workers.” Some industry leaders and provincial officials have also raised concerns that opening the door to Chinese electric vehicles could further complicate relations with Washington.
The collapse of negotiations with Washington has heightened concerns in Ottawa about Canada’s heavy reliance on the U.S. market, which absorbs roughly three-quarters of Canadian exports. Against that backdrop, the agreement with China represents the most significant reset in relations between Ottawa and Beijing in years. Trade ties had deteriorated following earlier disputes and retaliatory tariffs, particularly in agriculture. Canadian canola exports to China were among the hardest hit, costing farmers billions of dollars in lost sales.
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