Canada and China Slash Tariffs on EVs and Canola

Two major trading partners just turned the page on years of friction with a deal that will benefit millions of workers and families.

Canada and China announced a breakthrough trade agreement this week that slashes tariffs on electric vehicles and canola, resetting a relationship that had grown tense under previous leadership. Canadian Prime Minister Mark Carney made the announcement during his visit to Beijing, the first by a Canadian prime minister since 2017.

The numbers tell an encouraging story. Canada will allow up to 49,000 Chinese electric vehicles at just 6.1 percent tariffs, down from the 100 percent rate imposed in 2024. That dramatic reduction brings trade back to pre-conflict levels while opening doors for Chinese investment in Canada's auto sector.

For Canadian farmers, the win is even sweeter. China will lower tariffs on Canadian canola seed to about 15 percent by March 1, down from a punishing 84 percent rate. That single change affects a $4 billion market that had been virtually shut to Canadian producers.

The deal extends beyond canola to include Canadian lobsters, crabs, peas, and canola meal. All will see anti-discrimination tariffs removed starting March 1, unlocking nearly $3 billion in export orders for Canadian farmers, fish harvesters, and processors.

Carney explained the thinking behind the electric vehicle portion. Canada needs to learn from innovative partners and tap into advanced supply chains to build its own competitive EV sector. The agreement promises Chinese investment in Canadian auto manufacturing, creating good jobs while accelerating the country's net-zero goals.

The two nations also pledged to restart high-level economic dialogue and strengthen cooperation in agriculture, energy, and green technology. President Xi Jinping committed to ensuring visa-free access for Canadians traveling to China, making people-to-people connections easier.

The Ripple Effect

This agreement shows how countries can choose cooperation over conflict, even after serious disagreements. The diplomatic reset demonstrates that trade relationships don't have to be zero-sum games.

For Canadian farmers who watched their markets disappear overnight when China imposed retaliatory tariffs in 2024, this deal represents real relief. A 10.4 percent drop in exports to China in 2025 hurt communities across Canada's agricultural heartland.

The timing matters too. As global trade relationships grow more complex, finding stable, predictable partnerships becomes increasingly valuable for workers and businesses planning their futures.

The agreement proves that patient diplomacy can unlock doors that seemed permanently closed just months ago.