Chinese President Xi Jinping and Canadian Prime Minister Mark Carney announced significant tariff reductions on Thursday, January 16, 2026, following a historic summit at the Great Hall of the People in Beijing. The agreement signals a dramatic reset in bilateral relations and marks Carney's position as the first Canadian prime minister to visit China since 2017, a visit that comes as Ottawa seeks alternatives to its strained relationship with the United States.
Under the new agreement, China will lower levies on Canadian canola oil from 85 percent to 15 percent by March 1, addressing a major concern for Canadian agricultural exporters who have faced punitive tariffs for years. In exchange, Canada has agreed to reduce tariffs on Chinese electric vehicles to the most-favored-nation rate of 6.1 percent, rolling back what had been a blanket 100 percent tariff imposed in tandem with the US in 2024. Canada will allow up to 49,000 Chinese EVs into the market at the reduced rate.
The deal extends beyond vehicles and canola to include reduced tariffs on Canadian lobsters, crabs, and peas, providing relief to fisheries and agricultural sectors that have been caught in the crossfire of trade tensions. President Xi noted that preliminary discussions on restoring cooperation began when the two leaders met at a regional economic conference in South Korea last October, describing Thursday's meeting as opening a new chapter in turning China-Canada relations toward improvement.
Prime Minister Carney, who was elected in April 2025, has actively sought to diversify Canada's trade partnerships amid deteriorating relations with Washington. During a press conference, Carney made the striking observation that Canada's relationship with China has become more predictable than its relationship with the United States, citing the candid and consistent dialogue Ottawa now enjoys with Beijing.
Canada has set an ambitious goal to increase exports to China by 50 percent by 2030, with officials estimating the new agreement will help unlock nearly three billion dollars in export orders for Canadian workers and businesses. The deal represents a significant pivot in Canadian trade policy, which had previously aligned closely with American positions on China.
The rapprochement has drawn criticism from some quarters, particularly those concerned about human rights issues and security implications of closer ties with Beijing. However, the Carney government has defended the approach as a pragmatic response to what it describes as unpredictable American trade policies under the Trump administration.
The summit concludes with both nations committing to expanded cooperation in energy, agri-food, and trade sectors. Analysts suggest the agreement reflects a broader realignment of global trade relationships as middle powers seek to navigate between competing great power interests, particularly as US protectionist policies push traditional allies to explore alternative partnerships.