Canada and China Forge Groundbreaking Trade Agreement

Canada and China have reached an initial trade agreement to reduce tariffs on electric vehicles and canola, aiming to rebuild strategic ties and enhance economic cooperation. This move is poised to increase Chinese investments in Canada's auto sector and unlock substantial opportunities for Canadian farmers and industries.

In a significant step toward strengthening international trade, Canada and China announced a preliminary agreement on Friday to reduce tariffs on electric vehicles and canola. The announcement came as Prime Minister Mark Carney visited China, marking the first Canadian prime ministerial visit since 2017. Carney's discussions with Chinese President Xi Jinping emphasized the mutual aim of dismantling trade barriers and establishing robust strategic partnerships.

The agreement stipulates that Canada will allow the entry of up to 49,000 Chinese electric vehicles under a 6.1% tariff rate, a move harkening back to levels before recent trade disputes. This initiative replaces the 100% tariff imposed by former Prime Minister Justin Trudeau in 2024, which was criticized for penalizing Chinese industries, said Carney. He emphasized the need to learn from innovative partners and strengthen ties in clean energy sectors.

Moreover, the deal includes significant concessions on canola tariffs, with China reducing rates from 84% to around 15% by March 1. This promises an influx of investment in Canada's agro-sector, further bolstering economic ties. As both nations navigate global trade dynamics, the deal marks a critical pivot towards a more predictable and cooperative relationship, reshaping the strategic economic landscape.

(With inputs from agencies.)