On the third day of his visit to Beijing, Canadian Prime Minister Mark Carney announced a significant rollback of his government’s trade restrictions on China: Ottawa will remove a previously levied 100% tariff on imported Chinese electric vehicles and substitute it with an import‑quota regime. Under the arrangement Carney outlined, 49,000 Chinese electric vehicles will enter Canada at the standard most‑favoured‑nation tariff of 6.1%, with the quota rising to 70,000 within five years. He described the change as restoring trade to “pre‑friction” levels and argued the move would both lower costs for Canadian car buyers and open the door to deeper industrial co‑operation.
The tariff had been imposed in August 2024, when Ottawa followed Washington in levying steep duties on Chinese EVs and on some steel and aluminium products, prompting a diplomatic chill and Chinese retaliatory probes that hit Canadian canola and other farm exports. The sudden return to managed access comes with omissions: Carney did not specify the duty on vehicles that exceed the quota, nor did he set a firm timetable for when the new regime will take effect. Those details will matter to manufacturers, dealers and farmers as they try to plan for planting and production cycles.
Beyond cars, the Canadian delegation signed a swathe of trade and investment agreements covering energy, mining and clean‑tech. Carney said Beijing had agreed in principle to reduce comprehensive tariffs on Canadian canola to roughly 15% by March and to lift retaliatory measures on canola meal, lobster, crab and peas from March until at least the end of the year. He also announced an intention to deepen cooperation on energy storage, grid projects and battery supply chains, and highlighted meetings with executives from battery maker CATL — which already has involvement in Ontario grid‑scale storage projects.
Ottawa framed the shift as pragmatic: quotas keep markets open and predictable while allowing government oversight, and attracting Chinese investment into Canadian clean energy and battery projects could accelerate the country’s decarbonisation goals. Officials hope the agreements will translate into near‑term export opportunities — Carney suggested the potential to unlock close to US$3 billion in orders for Canadian farmers, fishers and processors — and into longer‑term industrial investment and jobs in regions that stand to benefit from battery and grid‑storage facilities.
The diplomatic tone was striking. Carney repeatedly contrasted the recent predictability and candour of talks with Beijing against what he described as the more fractious trajectory of relations with Washington, saying the China engagement had been “more predictable” in recent months. That judgment will provoke scrutiny in Ottawa and among Canada’s allies: many Western capitals are grappling with how to balance economic ties to China with concerns about strategic dependence, human rights and national security.
Domestic politics complicate the reset. Several senior Canadian ministers who now champion engagement with China previously described Beijing as a growing threat. Carney himself acknowledged security risks and framed the rapprochement as one element of a broader strategy to bolster Canada’s resilience — through alliances, risk mitigation and safeguards — even as Ottawa seeks investment and market access. For farmers and exporters who bore the brunt of Beijing’s earlier retaliation, the announcement offers relief but also uncertainty until the technical details are finalised.
For an international audience, the move illustrates a wider trend: several U.S. allies — from South Korea to Britain and Germany — have recently sought to repair and expand economic ties with Beijing even as Washington pursues tougher industrial policy and protectionist measures. Canada’s choice to trade steep tariffs for managed quotas signals a middle path that accepts some controls while restoring larger volumes of commerce, a model other countries may emulate if their political economies prioritise market access and investment over unilateral decoupling.
Key unknowns remain the test of the deal: whether China will publicly confirm all the measures Ottawa announced (including a visa‑waiver for Canadian citizens that Beijing has not yet verified), how Ottawa will structure oversight of foreign investment in sensitive supply chains, and what tariffs — if any — will apply above the quota. The coming weeks will reveal whether this reset produces durable commercial flows or merely a temporary political détente.