Canadian Prime Minister Mark Carney hailed a new “strategic partnership” with China during a meeting with Chinese leader Xi Jinping on Friday, as the US ally took steps to reset ties with Beijing amid historic friction with Donald Trump.
Canada would ease tariffs on Chinese electric vehicles and expected China to significantly reduce barriers to tariffs on Canadian canola seed later this year, Ottawa said in a statement after the meeting, in a major step to ease long-standing trade tensions.
Carney is the first Canadian prime minister to visit since 2017, a year before relations between the two countries cratered after Canada arrested an executive from Chinese telecoms giant Huawei at the request of the US, and Beijing imprisoned two Canadian citizens shortly after.
The prime minister’s visit this week had made clear Ottawa’s new objective: to move its economy closer to its second-largest trading partner following a year in which Trump ratcheted up trade and political frictions with Canada, imposing sweeping tariffs and publicly musing about turning the country into the 51st US state.
Speaking to Xi in Beijing’s ornate Great Hall of the People on Friday morning, Carney described the countries’ “new strategic partnership” as one that could work to improve a strained international system.
“Together we can build on the best of what this relationship has been in the past to create a new one adapted to new global realities,” Carney said in his remarks, noting that the two sides would focus on areas where they can make “historic gains,” such as agriculture and energy.
The deepening partnership would “help improve” the multilateral system, which “in recent years had come under great strain,” he added.
The language marks a sharp departure from the rhetoric of recent years when Canada and its G7 partners raised concerns about Beijing’s activities on the global stage and interference in their democracies.
And it is sure to be welcomed by Beijing, which has long sought to drive wedges between the US and its allies and to reshape what it sees as a world order unfairly dominated by the US bloc.
In his remarks to Carney, Xi said both countries should “advance the building of a new type of strategic partnership between China and Canada.”
Trade agreements
A joint statement following the meeting said that the two sides “welcomed the progress made in resolving trade issues through consultations,” according to a copy released by the Chinese state media Xinhua.
A separate Canadian statement specified that Canada will allow up to 49,000 Chinese electric vehicles (EVs) into the Canadian market per year, with the most-favoured-nation tariff rate of 6.1%. The move rolls back what had previously been an irritant in their relations: a blanket 100% tariff on the goods imposed by Canada in tandem with the US in 2024.
This agreement “will drive considerable new Chinese joint-venture investment” in Canada’s auto industry, the statement said.
It also said that Canada expected China to reduce its tariffs on Canadian canola seed to about 15% by March 1 – a significant drop from the roughly 85% levels that had been imposed on the entry of the good into China, where it makes up a $4 billion market. Other products like lobsters and peas would also see tariffs lifted on that timeline, Canada said.
China had announced retaliatory tariffs on Canadian agricultural and food products last March, hurting Canadian farmers and effectively shutting Canada’s second-largest market for the crop.
Carney and Xi discussed increasing two-way investment in clean energy and technology, agri-food, wood products, and other sectors as part of a bid to elevate exports to China by 50% by 2030, Ottawa said.
A China reset
As ties with the US have soured, Carney, who was elected in April, has looked to boost ties with other partners, including Europe, India, and now China.
Trump slapped tariffs on Canadian goods (while exempting many under a pre-existing trade agreement) last year and has frequently called for Canada to become the “51st state” – sparking concern and disbelief among Canadians.
While that rhetoric has cooled, Ottawa is paying close attention to Trump’s escalating talk of taking control of Greenland, the Danish territory off Canada’s eastern coast.
That push for a China reset comes despite a difficult relationship between the two sides over the past few years.
During a debate ahead of his election in April, Carney replied “China” when asked to name Canada’s biggest security threat.
