Carney reaches ‘landmark’ tariff-quota deal with China on EVs, canola

Carney said Ottawa expects Beijing to drop canola seed duties to 15 per cent from 84 per cent by March 1, and called that “enormous progress.”

Canadian canola meal, lobsters, crabs and peas will no longer be subject to Chinese “anti-discrimination” tariffs from March to at least the end of the year. There was no mention of canola oil, which is subject to a 100 per cent tariff.

In return, up to 49,000 Chinese electric vehicles will be allowed into the Canadian market each year at a 6.1 per cent tariff instead of the current 100 per cent tariff.

By 2030, half of those imported vehicles will cost less than $35,000 — a measure that Carney said will ensure EVs are more affordable for Canadians.

He added that the 49,000 vehicles roughly equal the number imported from China in 2023, before the tariffs, and account for less than three per cent of the domestic auto market.

Ontario Premier Doug Ford slammed the deal in a social media post Friday, saying China now has “a foothold in the Canadian market” that it will use at the expense of Canadian workers.

He said the deal risks closing the door on Canadian automakers to the U.S. market and urged the federal government to support Ontario’s auto sector.

“That means making the sector more competitive by ending the electric vehicle mandate, harmonizing regulations with key trading partners and scrapping federal fees that do nothing but add thousands to the cost of making vehicles and chase away investments,” Ford said in a post on X.

In a media statement, Saskatchewan Premier Scott Moe — who joined Carney in Beijing — called the deal “very good news for Canada and Saskatchewan.”

“Today demonstrates the importance of foreign trade missions and shows what can be achieved when the federal and provincial governments and our export industries work together to strengthen our trade relationships,” he added.

Carney announced the pact after he met with President Xi Jinping on Friday, ending a multi-year trade dispute that began when the previous Liberal government levied EV tariffs to protect Canada’s auto sector.

In late 2024, Ottawa followed moves by former U.S. president Joe Biden and the European Union to counter China’s rapidly growing electric vehicle industry.

Former prime minister Justin Trudeau’s government imposed 100 per cent tariffs on Chinese electric vehicles, arguing the prospect of cheap, heavily subsidized EVs being dumped in the North American market constituted a threat to the auto sector.

China responded in March 2025 with a 100 per cent tariff on Canadian canola oil, peas and other products, along with 25 per cent on pork and seafood products such as lobster.

That was followed by a levy of almost 76 per cent on Canadian canola seed in August that year. China’s anti-dumping investigation into canola seeds was set to wrap up in March.

Canada is the top global exporter of canola and China is the industry’s second-largest market after the U.S.

Ottawa also imposed a 25 per cent import tax on Chinese steel and aluminum in October 2024.

Greg Cherewyk, president of Pulse Canada, was in Beijing with the Canadian delegation and said the deal was welcome news.

Tariffs had effectively stopped all shipments of Canadian peas to China, the world’s largest market, and Cherewyk said Canadian yellow peas worth about $700 million a year were being displaced by Russian products.

“It was really important that this didn’t last as long as we had feared it would last, into the years. It was resolved in what really amounts to a short period of time,” he said, adding that the timing is ideal for farmers in Canada to make seeding decisions.

Just a year ago during the spring election, Carney described China as the biggest security threat facing Canada. Speaking to media Friday, his answer to a reporter’s question was less clearcut.

“The security landscape continues to change, and in a world that’s more dangerous and divided, we face many threats,” Carney replied. “You manage the threats through engagement.”

The deal also comes as the Liberal government seeks to double non-U.S. exports by 2030 — and boost exports to China by 50 per cent by that date.

Carney said he raised human rights in the meeting with Xi and that Canada’s approach is one of “value-based realism.”

“We fundamentally stand up for human rights, for democracy, territorial integrity, rights to self-determination,” he said. “We take the world as it is, not as we wish it to be.”

Carney and Xi met in the fall on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea. It marked the first official meeting between the leaders of Canada and China since 2017.

On Friday, Xi described that as a “turnaround” in bilateral relations.

In the wake of that key meeting last fall, both leaders directed their officials to work on resolving lasting trade irritants.

This report by The Canadian Press was first published Jan. 16, 2026.

— With files from Sarah Ritchie in Ottawa

Kyle Duggan, The Canadian Press

by The Canadian Press

Carney reaches ‘landmark’ tariff-quota deal with China on EVs, canola

What's Trending