China and Canada announce tariff relief after high-stakes meeting

Chinese leader Xi Jinping and Canadian Prime Minister Mark Carney have announced lower tariffs, signaling a reset in relations between their countries after a key meeting in Beijing.

China is expected to cut duties on Canadian canola oil from 85% to 15% by March 1, while Ottawa has agreed to tax Chinese electric vehicles at the MFN rate, 6.1%, Carney told reporters.

The deal is a breakthrough after years of strained ties and tit-for-tat tariffs. Xi hailed the “turnaround” in their relationship, but it is also a victory for Carney, the first Canadian leader to visit China in nearly a decade.

He has sought to diversify Canadian trade away from the U.S., his country’s largest trading partner, due to the uncertainty caused by Trump’s on-off tariffs.

The deal could also lead to more Chinese investment in Canada, right on America’s doorstep.

Carney himself seemed to allude to the fact that this was a result of Trump’s tariffs, which have now pushed one of the US’s most important allies towards its biggest rival.

He told reporters that Canada’s relationship with China had been “more predictable” over the past month and that he found the talks with Beijing “realistic and respectful.”

He also made clear that Ottawa does not agree with Beijing on everything, adding that in his talks with Xi he made clear Canada’s “red lines,” including human rights, concerns about election interference and the need for “guardrails.”

Observers believe Carney’s visit could set an example for other countries around the world that are also feeling the pain of Washington’s tariffs.

In contrast, Xi has sought to show that China is a stable global partner and has pushed for more pragmatic ties – in Beijing’s words, “a win-win situation” for all.

And it seems to work. The South Korean president and the Irish prime minister have both visited Beijing in recent weeks. The British Prime Minister is expected to visit soon, as is the German Chancellor.

Carney said the “world has changed dramatically” and the way Canada positions itself “will determine our future for decades to come,” he added.

Earlier during his three-day visit, he had said the partnership between Canada and China is positioning the two countries for a “new world order.” He later added that the multilateral system had been “eroded, to use a polite term, or undermined”.

As the Chinese and Canadian delegations sat in the Great Hall of the People on Friday, Xi said: “The healthy and stable development of China-Canada relations is conducive to world peace, stability, development and prosperity.”

Tariffs have been a major sticking point between the two sides.

In 2024, Canada imposed 100% tariffs on Chinese electric vehicles, following similar US restrictions.

Last year, Beijing retaliated with tariffs on more than $2 billion of Canadian agricultural and food products such as canola and oil. As a result, Chinese imports of Canadian goods fell by 10% in 2025.

China is Canada’s second-largest trading partner, recording more than C$118 billion ($85 billion; £63 billion) in two-way goods trade in 2024.

That is far behind the US, Canada’s closest ally, which traded more than $761 billion (£568 billion) worth of goods with Ottawa in 2024.

But economic ties with China are increasingly important to Carney, who said ahead of his visit that Canada was focused on building a “more competitive, sustainable and independent economy” in the face of “global trade disruption.”

Carney, who arrived in Beijing on Wednesday, met with senior executives from leading Chinese companies, including an electric vehicle battery maker and an energy giant.

On Thursday, the two countries signed several agreements on energy and trade cooperation.

The visit is a “reset of a relationship” that may be “modest in ambition” but “much more realistic about what we can reasonably obtain,” said Colin Robertson, a former Canadian diplomat and vice-president of the Canadian Global Affairs Institute.

The last Canadian prime minister to visit China was Justin Trudeau, who met Xi in Beijing in 2017.

That visit took place before the relationship soured in 2018, following the Canadian arrest of Meng Wanzhou, the chief financial officer of Chinese tech giant Huawai, at the request of the US.

Days later, China arrested Canadian nationals Michael Kovrig and Michael Spavor on espionage charges – a move critics saw as retaliation for Meng’s arrest, which China denied.

Meng and both Michaels were released in 2021.

Ahead of the Carney-Xi meeting, Michael Kovrig wrote on X that the visit should not only be about strengthening ties, but also about “managing influence.”

Kovrig described the Chinese negotiators as “extremely agile, calculating and always seeking influence.”

“Therefore, there must be discipline,” he wrote, adding that Carney should also advocate for Canadians imprisoned in China. According to Canadian media, there are about 100.

Speaking to reporters, Carney was clear that Ottawa will work with countries that don’t share the same values ​​in a “more limited, more specific” way.

“We are very clear about where we cooperate, where we differ,” he said, adding that Chinese claims over self-ruled Taiwan and Hong Kong-jailed pro-democracy figure Jimmy Lai emerged in “broad discussions.”

Canada and China have “different systems,” he said, which limits the scope of their cooperation.

“But to have an effective relationship, we have direct conversations. We don’t pick up a megaphone and have the conversations that way.”