Canadian Prime Minister Mark Carney and Chinese President Xi Jinping inaugurated “a new chapter” of Canada–China relations last week, establishing a new “strategic partnership” and economic and trade co-operation roadmap, and working to resolve trade irritants.
On Friday, Carney remarked that Canada and China “have different systems, histories, and perspectives... we respect those differences,” adding separately that “we take the world as it is, not as we wish it to be.” Carney expounded on his interests-driven approach — hardened by U.S. President Donald Trump’s hostile foreign policy — in a frank address in Davos, Switzerland, on Tuesday.
In Beijing, Carney and Xi focused on "areas of alignment” rather than divergence, unveiling a new Canada–China strategic partnership encompassing energy, economic and trade co-operation, public safety and security, multilateralism, and culture and people-to-people ties. The announcement did not include ‘sensitive’ sectors — such as artificial intelligence and defence — but referenced commitments to combat drug trafficking, cybercrime, and money laundering.
An op-ed in the Chinese state-run Global Times argued that the Xi-Carney meeting represented “a triumph of realism and co-operativism over ideological rigidity.”
Beijing’s readout suggested that China and Canada “should respect each other’s sovereignty [...], choice of political system, and development path,” and noted that Canada reaffirmed its one-China policy — a remark missing from the Canadian readout.
Let’s make a (provisional) deal
Canada and China reached a preliminary agreement to untangle a web of tariffs and restrictions. Canada now “expects” that China, beginning March 1, will slash tariffs on Canadian canola seed to 15 per cent, down from 84 per cent. Ottawa also expects Beijing to remove tariffs on Canadian canola meal, lobster, peas, and crabs by the same date, and increase imports of Canadian beef and other products.
Additionally, Canadians will soon be eligible for visa-free travel to China, building on the November resumption of Chinese group tours to Canada.
Canada, in turn, will allow up to 49,000 Chinese electric vehicles into Canada at a most-favoured-nation tariff rate of 6.1 per cent — down from the 100 per cent rate imposed in 2024. In the first 11 months of 2025, only 156,936 zero-emissions vehicles were sold in Canada — a decrease of 34.5 per cent compared to the same period in 2024.
Canada will also continue granting temporary relief to some Chinese steel and aluminum exports.
In 2024, Canada imported C$88.8 billion worth of Chinese goods and exported C$30 billion worth of Canadian goods to China. For comparison, the same year, Canada–U.S. trade in goods reached an estimated C$1.05 trillion.
An auto correction
Carney argued this week that China’s effective re-entry into Canada’s EV market represented “an opportunity for Ontario, [...] for Ontario workers, [and] for Canada,” despite the objections of Ontario Premier Doug Ford, who labelled it a “terrible deal.”
Ottawa must now parlay Chinese enthusiasm into investment in Canada’s beleaguered auto sector. In Beijing, Canadian industry minister Mélanie Joly teased an upcoming federal auto strategy that will reportedly incentivize foreign companies — including from China, South Korea, and Germany — to assemble vehicles in Canada. Canada’s auto sector directly employs roughly 125,000 people.
According to the Korea Times, Ottawa wants to see South Korea’s Hyundai, for one, invest in Canada as part of a broader Ottawa–Seoul deal involving Hanwha Ocean, a South Korean shipbuilding conglomerate vying for Canada’s lucrative submarine contract.
The order — worth tens of billions of dollars — would be the “largest single defence export contract in [South Korea’s] history.”
