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.

China and Canada’s leaders opened on Friday (October 31, 2025) their first formal talks since 2017, with Xi Jinping meeting Prime Minister Mark Carney in South Korea, Chinese state media reported.

Canada’s relations with China are among the worst of any Western nation but both are at the sharp end of Donald Trump’s tariff onslaught, even after Mr. Xi and the U.S. leader’s deal on Thursday to dial back tensions.

Ties fell into a deep freeze in 2018 after the arrest of a senior Chinese telecom executive on a U.S. warrant in Vancouver and China’s retaliatory detention of two Canadians on espionage charges.

In July, Mr. Carney announced an additional 25% tariff on steel imports that contain steel melted and poured in China.

Beijing announced the following month it would impose a painful temporary customs duty of 75.8% on Canadian canola imports.

Canada is among the world’s top producers of canola, an oilseed crop that is used to make cooking oil, animal meal and biodiesel fuel.

But Canada and China have both been heavily targeted by Mr. Trump’s global trade onslaught.

Mr. Trump said on Thursday he would halve fentanyl-related tariffs on China to 10% while Mr. Xi agreed to keep rare earths flowing and boost imports of U.S. soybeans.

But the average U.S. tariff on Chinese imports remains at 47%, Mr. Trump said.

The U.S. President on Saturday said he was hiking tariffs on Canadian goods by an additional 10% and terminated all trade talks.

This followed what Mr. Trump called a “fake” anti-tariff ad campaign that featured the late ex-President Ronald Reagan.

“[The] old world of steady expansion of rules-based liberalised trade and investment, a world on which so much of our nations’ prosperity — very much Canada’s included — [is based], that world is gone,” Mr. Carney told the APEC gathering.

Japan

Later Mr. Xi was also due later to meet Japan’s first woman premier, Sanae Takaichi, for the first time.

The regular visitor to the flashpoint Yasukuni shrine honouring Japan’s war dead is seen as a China hawk, although recently she has toned down her remarks.

But in her first policy address last Friday, she still declared that the military activities of China — and North Korea and Russia — “have become a grave concern”.

She announced that Japan would be spending 2% of gross domestic product on defence this fiscal year — two years ahead of schedule.

China responded by saying that there were “serious doubts among (Japan’s) Asian neighbours and the international community about whether Japan is truly committed to an exclusively defensive posture and the path of peaceful development”.

On Mr. Trump’s visit to Japan on his way to Busan, Ms. Takaichi spoke alongside the U.S. leader aboard a U.S. aircraft carrier and said her country faces “unprecedented” security dangers.

She is also a strong backer of Taiwan and backs security cooperation with the self-ruled island.

Japanese media said that Ms. Takaichi was expected to convey to Mr. Xi grave concerns over China’s behaviour, including around the Senkaku Islands, known as the Diaoyu Islands by China.

She was also expected to press for the early release of Japanese citizens detained in China and request that the safety of Japanese expatriates in China be ensured, the reports said.

Japanese industry is also keen to ensure that supplies of rare earths from China — which have become a football in Mr. Xi’s trade tussle with Mr. Trump — keep flowing.

“It could be a frosty get-to-know-you meeting as Mr. Xi Jinping has not sent a congratulatory message to Takaichi, wary of her reputation as a China hawk,” Yee Kuang Heng, a professor at the University of Tokyo’s Graduate School of Public Policy, told AFP.

“Overall though, stability is a shared priority and both sides will probably stick to the broad mantra established over the past few years of working towards a ‘mutually beneficial relationship based on common strategic interests’,” Mr. Heng said.