Canada and China End 8-Year Rift With Historic Trade Deal

Canada and China just turned the page on eight years of cold relations with a deal that could reshape North American trade.

Prime Minister Mark Carney and President Xi Jinping met in Beijing on Friday to announce what Carney called a "landmark deal" under a new strategic partnership. The breakthrough ends years of diplomatic spats, retaliatory arrests, and punishing tariffs between the two nations.

The numbers tell the story of real change. China will slash tariffs on Canadian canola products from 84 percent to around 15 percent by March 1, reopening what used to be Canada's largest canola market. Canadian visitors can now enter China visa-free, making travel and business easier for thousands.

Canada also agreed to import 49,000 Chinese electric vehicles at preferential tariffs of just 6.1 percent. Carney described this as returning to trade levels before recent tensions began.

The timing matters. Canada traditionally relies heavily on the United States, which bought 75 percent of Canadian goods in 2024. But President Donald Trump has aggressively raised tariffs on Canadian steel, aluminum, vehicles, and lumber, forcing Ottawa to look elsewhere. Carney announced plans last October to double Canada's non-US exports by 2035.

The relationship between Canada and China hit rock bottom in 2018 when Canada arrested Huawei executive Meng Wanzhou on a US warrant. China retaliated by detaining two Canadians on espionage charges and imposing heavy tariffs on Canadian exports. Beijing also faced accusations of interfering in Canadian elections.

Xi told Carney their meeting at the APEC summit last October "opened a new chapter" in improving relations. "The healthy and stable development of China-Canada relations serves the common interests of our two countries," Xi said at Beijing's Great Hall of the People.

The Ripple Effect

This deal shows how shifting global politics can create unexpected partnerships. While China remains Canada's second-largest market at less than four percent of exports, this agreement opens doors that seemed permanently closed just months ago. Other countries watching US trade tensions may see Canada's pivot as a roadmap for diversifying their own economic ties.

The breakthrough proves that even deeply strained relationships can find their way back when both sides see mutual benefit.