Canada's prime minister is betting a trade deal with Beijing is worth a fight with Washington. Mark Carney, on a visit to Beijing, announced a "preliminary but landmark" deal that will reopen Canada's market to Chinese-made EVs, reversing tariffs that effectively shut them out in 2025. Ottawa will now allow up to 49,000 Chinese EVs a year at a 6.1% tariff—rising to 70,000 by year five—levels Carney said would restore imports to roughly where they were before Canada joined a US-led 100% tariff, Politico reports. In return, China will sharply scale back its own punitive duties on Canadian canola, cutting a combined rate of about 85% down to roughly 15% by March 1.
The deal will also remove Chinese tariffs on Canadian products including lobster, crab, and peas, the CBC reports. The move comes as Carney and Chinese President Xi Jinping try to reset a strained relationship and as Ottawa looks to reduce its reliance on an increasingly volatile United States under President Trump. Carney told reporters the relationship with China has become "more predictable," even as he stressed that ties with the US remain "more multifaceted, much deeper, much broader." His government has set a target of doubling Canada's trade with non-US partners within a decade, pushing harder into China and the Middle East for both exports and investment.
The EV shift puts Canada at odds with both Washington and Mexico, which recently hiked its own tariff on Chinese electric cars to 50%. US and Canadian lawmakers and unions have long warned that low-cost Chinese vehicles threaten North America's auto industry, a concern echoed by Ontario Premier Doug Ford, who urged Carney to keep tariffs unless China builds cars in Canada and hires local workers. Carney noted that even with the new quotas, Chinese EVs would represent only a small fraction of Canada's 1.8 million annual auto sales. He said China is expected to start investing in the Canadian auto industry within three years, the AP reports.
Flavio Volpe, president of the Automotive Parts Manufacturers' Association, tells the CBC that he likes some of the "guardrails" in the EV agreement, including a requirement to meet Canadian safety standards. The deal, however, is at odds with Carney's push to "buy Canadian," says Volpe, a member of Carney's council on US-Canada relations. "The concern is we're mostly export-oriented, and we're trying to return to build Canada for Canada because, of course, we've got our friction, let's call it, with the Americans," he says. "So every single sale counts. It's much better to get that sale from a company that's manufacturing here, that's buying supplies here and employing Canadians here."
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