Canada, China strike preliminary deal easing canola tariffs in exchange for EV access

Prime Minister Mark Carney says Canada has reached a preliminary trade agreement with China that would ease long-standing agricultural tariffs while allowing a limited number of Chinese-made electric vehicles into the Canadian market.

Under the deal, China is expected to reduce duties on Canadian canola seed to 15 per cent by March. Tariffs on canola meal, as well as lobster, crab and peas, are set to be lifted from March through at least the end of the year, offering relief to farmers and exporters who have faced restricted access to one of Canada’s largest overseas markets.

In exchange, Canada will permit up to 49,000 Chinese electric vehicles to enter the country under a tariff rate of 6.1 per cent. Carney described the arrangement as a first step rather than a comprehensive trade pact, saying it is intended to support economic growth while maintaining safeguards for domestic industries.

The agreement was reached following Carney’s meeting with Chinese President Xi Jinping in Beijing, marking a significant thaw in relations after years of trade friction. The dispute began when the previous Liberal government imposed tariffs on Chinese EVs as part of a broader effort to protect Canada’s auto manufacturing sector.

Canola producers in Western Canada, particularly in Alberta and Saskatchewan, have repeatedly called for improved access to China, citing the crop’s importance to rural economies. Industry groups have said even partial tariff relief could stabilize prices and improve planning ahead of the next growing season.

Carney said further negotiations are expected as both countries assess the impact of the agreement, with Ottawa indicating it will continue to balance trade diversification with domestic economic priorities.