A Re-Set in Canada-China Relations: Strategic Partnership, EVs, and a New Trade Roadmap

Prime Minister Mark Carney’s current visit to Beijing marks a significant turning point in Canada-China relations. It is the first official visit by a Canadian Prime Minister since 2017, and has produced both a high-level joint statement between Prime Minister Carney and President Xi Jinping and also a detailed Canada–China Economic and Trade Cooperation Roadmap that is intended to give structure and institutional follow-through to this renewed bi-lateral engagement.

Taken together, the announcements signal a deliberate shift in the relationship that has been defined recently by escalating tension. The Carney government is clearly seeking to diversify Canada’s trade relationships ahead of the CUSMA renegotiation with the United States and Mexico later this year.

What the Leaders Agreed To

The new strategic partnership rests on four broad areas: energy and clean technology, agri-food and trade, multilateral cooperation, and public safety and people-to-people ties. The most commercially significant element is the decision to allow up to 49,000 Chinese electric vehicles into the Canadian market at the most-favoured-nation tariff rate of 6.1 per cent. This volume reflects pre-friction import levels in 2023–24 and represents less than three per cent of the Canadian market. The government’s objective is not simply consumer access; it is to catalyse Chinese joint-venture investment in Canada with “trusted partners,” accelerate the build-out of a domestic EV supply chain, and create manufacturing opportunities for Canadian workers.

Ontario's Premier Doug Ford immediate came out against the EV importation allowance, noting that "this is going to be terrible for not only the people of Ontario, but especially the auto manufacturers, the supply chain."

The EV measure allowed for a tariff reduction on agri-food. By March 1, 2026, China is expected to lower tariffs on Canadian canola seed to approximately 15 per cent, down from roughly 85 per cent today. China is a $4-billion market for Canadian canola, so this change would be a major win for Prairie producers and processors. In addition, China is expected to remove anti-discrimination tariffs on canola meal, lobsters, crabs, and peas from March 1 until at least the end of 2026. Ottawa estimates that, together, these measures could unlock nearly $3 billion in export orders, with further progress anticipated in sectors such as beef and pet food.

Canada has also agreed to extend relief for tariffs on certain Chinese steel and aluminum products that are currently in low supply or not made in Canada. Several remission measures will be extended until the end of 2026, which covers 66 lines of product-specific remissions and 59 tariff lines of company-specific remissions. Some remissions will also be expanded to cover additional steel, aluminum, and steel derivative products.

Beyond trade, the leaders emphasized cooperation on clean energy, batteries, critical minerals, and climate competitiveness, with Prime Minister Carney meeting Chinese energy and cleantech executives to identify investment opportunities in Canada. They also committed to deeper collaboration in multilateral forums, including APEC and the WTO, and to enhanced cooperation on issues such as narcotics trafficking, cybercrime, and money laundering.

The Canada-China Economic Trade Cooperation Roadmap: Why It Matters

If the Leaders’ statement sets the tone, the Canada–China Economic and Trade Cooperation Roadmap provides the mechanics. It underpins the reset because it institutionalizes regular engagement and creates clearer channels for resolving disputes and advancing commercial opportunities.

At its core, the Roadmap revitalizes the Joint Economic and Trade Commission (JETC) as the central forum for managing the relationship. The JETC will now be led by Trade Ministers, meet at least annually, and draw in experts from other departments as needed. Many of the bilateral disputes of recent years, particularly in agri-food, suffered from inconsistent institutional channels. The Government of Canada simply wasn't getting through to the right audiences. The Roadmap also commits both sides to resuming the Intellectual Property Working Group and potentially reviving the Trade Remedies Working Group, which could help prevent future trade frictions from escalating.

The Roadmap also extends into green and sustainable trade, including cooperation on modern wood construction; e-commerce and digital trade promotion; increased direct flights and tourism; and the creation of a new financial working group to discuss monetary policy, financial stability, anti-money laundering, and cross-border capital flows. Finally, it situates the bilateral relationship within broader multilateral efforts at the WTO and APEC, with Canada supporting China’s 2026 APEC presidency and welcoming China’s continued interest in CPTPP accession.

Implications for Canadian Businesses

For Canadian energy, cleantech, and critical minerals companies, the combination of the Leaders’ statement and the Roadmap suggests a more welcoming environment for structured Chinese investment and partnerships, particularly where projects align with Canada’s broader industrial strategies. That said, national security screening under the Investment Canada Act will remain a central consideration, especially in sensitive sectors.

For the automotive sector, the controlled reopening to Chinese EVs will introduce new competitive dynamics, particularly in the lower-cost segment, which consumers might find attractive. However, real success will be measured in the amount of Chinese investment made in Canadian-based EV manufacturing over the next several years.

For agri-food, this is one of the most consequential developments in years. A durable reduction in canola tariffs would restore a cornerstone export market, while the Roadmap’s emphasis on technical cooperation and dispute management should reduce the risk of sudden, politically driven trade disruptions.

How the United States reacts to this warming relationship remains to be seen. Sussex will be watching closely for potential fall-out and how the Government of Canada continues to walk the fine line between re-engaging China and attracting additional negative attention from the White House.