Breaking with U.S., Canada agrees to cut tariff on Chinese EVs in return for lower tariffs on its farm products

Breaking with the United States, Canada has agreed to cut its 100% tariff on Chinese electric cars in return for lower tariffs on Canadian farm products, Prime Minister Mark Carney said Friday (January 16, 2026).

PM Carney made the announcement after two days of meetings with Chinese leaders. He said there would be an initial cap of 49,000 vehicles on Chinese EV exports to Canada, growing to 70,000 over five years. China will reduce its tariff on canola seeds, a major Canadian export, from about 84% to about 15%, he told reporters.

“It has been a historic and productive two days,” Mr. Carney said, speaking outside against the backdrop of a traditional pavilion and a frozen pond at a Beijing park. “We have to understand the differences between Canada and other countries, and focus our efforts to work together where we’re aligned.”

Earlier Friday (January 16, 2026), he and Chinese leader Xi Jinping pledged to improve relations between their two nations after years of acrimony.

Mr. Xi told Mr. Carney in a meeting at the Great Hall of the People that he is willing to continue working to improve ties, noting that talks have been underway on restoring and restarting cooperation since the two held an initial meeting in October on the sidelines of a regional economic conference in South Korea.

“It can be said that our meeting last year opened a new chapter in turning China–Canada relations toward improvement,” China’s top leader said.

Carney looks to improve global governance

Mr. Carney, the first Canadian prime minister to visit China in eight years, said better relations would help improve a global governance system that he described as “under great strain.”

He called for a new relationship “adapted to new global realities” and cooperation in agriculture, energy and finance.

Those new realities reflect in large part the so-called America-first approach of U.S. President Donald Trump. The tariffs he has imposed have hit both the Canadian and Chinese economies. Carney, who has met with several leading Chinese companies in Beijing, said ahead of his trip that his government is focused on building an economy less reliant on the U.S. at what he called “a time of global trade disruption.”

A Canadian business owner in China called Carney’s visit game-changing, saying it re-establishes dialogue, respect and a framework between the two nations.

“These three things we didn’t have,” said Jacob Cooke, the CEO of WPIC Marketing + Technologies, which helps exporters navigate the Chinese market. “The parties were not talking for years.”

Canada had been aligned with U.S. on tariffs

Canada had followed the U.S. in putting tariffs of 100% on EVs from China and 25% on steel and aluminum under former Prime Minister Justin Trudeau, Mr. Carney’s predecessor.

China responded by imposing duties of 100% on Canadian canola oil and meal and 25% on pork and seafood. It added a 75.8% tariff on canola seeds last August. Collectively, the import taxes effectively closed the Chinese market to Canadian canola, an industry group has said.

Overall, China’s imports from Canada fell 10.4% last year to $41.7 billion, according to Chinese trade data.

China is hoping Mr. Trump’s pressure tactics on allies such as Canada will drive them to pursue a foreign policy that is less aligned with the United States. The U.S. president has suggested Canada could become America’s 51st state.

Mr. Carney departs China on Saturday (January 17, 2026) and visits Qatar on Sunday (January 18, 2026) before attending the annual gathering of the World Economic Forum in Switzerland next week.

He will meet business leaders and investors in Qatar to promote trade and investment, his office said.