Canada and China have agreed to reduce tariffs on electric vehicles and canola as part of a broader effort to reset trade ties. The deal, announced during Prime Minister Mark Carney’s visit to Beijing, restores lower duties on Chinese EVs while prompting Beijing to cut levies on key Canadian agricultural exports.
Canada and China have reached a preliminary trade agreement aimed at resetting their relationship and removing key barriers. During Prime Minister Mark Carney’s visit to Beijing, the first Canadian prime minister to go there since 2017, both countries agreed to reduce tariffs on electric vehicles and canola products, while also signalling broader cooperation.
Under the deal, Canada will allow up to 49,000 Chinese-made electric vehicles to enter the country at a 6.1% tariff, instead of the 100% duty imposed in 2024 by former Prime Minister Justin Trudeau. The quota is expected to rise gradually, reaching around 70,000 vehicles within five years. Carney argued that lowering tariffs will help Canada build a competitive EV industry by learning from global partners and accessing their supply chains.
The move has drawn criticism from some Canadian officials, including Ontario Premier Doug Ford, who warned it could lead to a surge of low-priced Chinese EVs without guaranteeing investment in Canada’s auto sector.
In response to Canada’s previous tariffs, China had imposed duties on over USD 2.6 billion worth of Canadian agricultural products, especially canola. Under the new arrangement, China is expected to cut its canola seed tariffs to about 15% by 1 March, down from 84%. Canada also anticipates that tariffs on canola meal, lobsters, crabs, and peas will be lifted from 1 March through the end of the year.
China’s Commerce Ministry confirmed the adjustments, saying the changes are part of a reciprocal response to Canada’s EV tariff reductions, signalling a mutual move toward easing trade tensions.
Earlier, Canada announced tariff relief on select steel and aluminium imports from the US and China to support domestic businesses burdened by ongoing trade disputes.
