Carney announces EV deal with China in exchange for canola tariff relief

Carney is giving Beijing a massive win, trading access for tens of thousands of Chinese-made electric vehicles in Canada for tariff relief on Canadian canola and other exports.

Source: X

Prime Minister Mark Carney is giving Beijing a massive win, trading access for tens of thousands of Chinese-made electric vehicles in Canada for tariff relief on Canadian canola and other exports.

Carney announced the deal Friday in Beijing, hours after meeting Chinese President Xi Jinping. He called it his first major trade arrangement since taking office and framed it as an economic boost.

Under the terms Carney outlined, Ottawa expects Beijing to reduce duties on Canadian canola seed to 15 per cent by March. Carney said Chinese tariffs on Canadian canola meal, lobsters, crabs and peas will be lifted from March through at least the end of the year.

In exchange, Carney said Canada will allow up to 49,000 Chinese electric vehicles into the Canadian market at a tariff rate of 6.1 per cent.

In a news release issued Friday, the Prime Minister’s Office (PMO) said Carney and Xi released a joint statement setting out the pillars of what it described as a new Canada-China “strategic partnership” focused on energy, agri-food and trade.

The release said the EV access agreement would allow imports at the most-favoured-nation tariff rate of 6.1 per cent. The 49,000-vehicle cap corresponds to volumes in the year prior to recent trade frictions, representing less than three per cent of Canada’s annual new-vehicle market.

The PMO said China is a $4 billion canola seed market for Canadian producers. It described the expected reduction to a combined tariff rate of about 15 per cent as a significant drop from current combined tariff levels of roughly 85 per cent.

The pact would mark a shift in Canada’s approach after the last Liberal government imposed steep tariffs on Chinese EVs, steel and aluminum — measures Ottawa said were intended to protect Canada’s auto sector from heavily subsidized imports.

The China tariffs targeted by the agreement have been a major pressure point for Western Canadian producers, particularly the canola sector, as Ottawa has sought to diversify trade relationships amid broader global uncertainty.

Carney said the agreement represents an initial step in stabilizing bilateral trade after years of strained relations and signalled that further negotiations are expected.

The PMO said Canada has set a goal of increasing exports to China by 50 per cent by 2030. It said the two countries also discussed deepening two-way investment in clean energy and technology, agri-food and other sectors.

It also said the two sides plan to increase law enforcement cooperation to combat narcotics trafficking, transnational and cybercrime, synthetic drugs and money laundering.