China and Canada have agreed to significantly ease punitive trade tariffs following a high-stakes meeting in Beijing between Chinese President Xi Jinping and Canadian Prime Minister Mark Carney, marking a notable thaw after years of diplomatic frost and economic retaliation, according to BBC News.
Under the agreement, China will slash tariffs on Canadian canola oil from a steep 85 percent to 15 percent by March 1, offering long-awaited relief to Canadian farmers battered by Beijing’s earlier reprisals. In return, Ottawa will lower tariffs on Chinese electric vehicles to the most-favoured-nation rate of 6.1 percent, though imports will be capped at 49,000 vehicles to protect domestic automakers from a flood of low-cost competition.
The deal signals a broader reset in China–Canada relations after prolonged tension fueled by tit for tat tariffs and political disputes. It is also a diplomatic milestone for Carney, the first Canadian prime minister to visit China in nearly a decade, and a visible step in his effort to diversify Canada’s trade relationships beyond the United States.
Carney has openly acknowledged that Washington’s unpredictable tariff policies, reintroduced under american President Donald Trump, have reshaped global alliances. Without naming the US directly, he suggested that China has emerged as a more “predictable” partner in recent months, describing his talks with Beijing as “realistic and respectful.”
Still, Carney stressed that rapprochement does not mean alignment. He said he raised Canada’s “red lines” with Xi, including concerns over human rights, election interference, and the need for firm diplomatic guardrails. “We take the world as it is, not as we wish it to be,” Carney said when pressed on China’s human rights record.
For Beijing, the agreement fits into Xi’s broader campaign to portray China as a stable and pragmatic global partner amid growing skepticism of US trade leadership. Xi hailed the “turnaround” in bilateral ties, saying healthy China and Canada relations contribute to global peace, stability, and prosperity.
Tariffs have long been the central fault line. In 2024, Canada imposed 100 percent duties on Chinese electric vehicles, echoing US measures. China responded by targeting more than $2 billion worth of Canadian agricultural exports, including canola seed and oil, causing Chinese imports of Canadian goods to fall by 10 percent in 2025.
Beyond canola, the new agreement will also reduce tariffs on Canadian lobster, crab, and peas, while opening the door to increased Chinese investment in Canada, an outcome with geopolitical implications given Canada’s proximity to the US.
Experts describe the visit as a pragmatic recalibration rather than a sweeping reconciliation. “This is a reset that’s modest in ambition but far more realistic,” said Colin Robertson, a former Canadian diplomat.
Carney himself framed the moment as historic. “The world has changed dramatically,” he said. “How Canada positions itself now will shape our future for decades to come.”
