Prime Minister Mark Carney announced in Beijing on January 16, 2026, that Canada will allow up to 49,000 Chinese electric vehicles a year into Canada at a 6.1 per cent tariff, replacing a 100 per cent surtax. In return, China will cut its tariff on Canadian canola seed from about 84 per cent to roughly 15 per cent.
A reset announced in Beijing
Mark Carney unveiled the agreement on Friday, January 16, after two days of meetings with Chinese leaders in Beijing, including talks with President Xi Jinping at the Great Hall of the People. Carney was the first Canadian prime minister to visit China since 2017, and the two leaders used the visit to proclaim a new strategic partnership spanning energy, trade, public safety, multilateral co-operation and cultural ties.
The centrepiece was a straight trade: electric vehicles for farm goods. Canada will admit an initial annual quota of 49,000 Chinese-built electric vehicles at the ordinary most-favoured-nation tariff of 6.1 per cent, rising to about 70,000 vehicles over five years. Ottawa expects more than half of the imported vehicles to be priced under $35,000 within five years.
“This is a return to levels prior to recent trade frictions, but under an agreement that promises much more for Canadians,” Carney told reporters. China exported 41,678 electric vehicles to Canada in 2023, before Ottawa imposed the 100 per cent surtax in 2024 in step with Washington.
What Canadian farmers and fishers get back
In exchange, Beijing agreed to lower its combined tariff on Canadian canola seed from about 84 per cent to about 15 per cent by March 1, and to remove anti-discrimination tariffs on canola meal, lobsters, crabs and peas at least through the end of 2026. The federal government has estimated the measures could unlock close to $3 billion in export opportunities for farmers, fishers and food producers.
The relief matters most on the Prairies. China had been the largest buyer of Canadian canola before retaliatory tariffs, imposed after the 2024 EV surtax, sharply reduced shipments. Carney also said he expected the EV arrangement to draw considerable Chinese joint-venture investment into Canada’s auto sector within three years.
Why Ottawa broke step with Washington
The deal was Ottawa’s clearest move yet to diversify trade away from the United States, whose tariffs on Canadian steel, aluminum and autos remain in place and whose president has mused about annexing Canada. The Carney government has set a goal of increasing exports to China by 50 per cent and doubling non-U.S. exports overall by 2030.
Washington’s reaction was mixed. U.S. Trade Representative Jamieson Greer called the EV decision “problematic,” while President Donald Trump initially said Carney should sign a deal with China if he could get one — before later warning of a 100 per cent tariff on Canadian goods if Ottawa pursued a free trade agreement with Beijing, something Carney said Canada has no intention of doing.
Praise from the Prairies, anger in auto country
Reaction at home split along regional lines, and that split explains the politics of the deal. Saskatchewan canola growers and several western premiers welcomed the tariff relief, with Alberta’s premier publicly crediting the federal government. In Ontario, however, auto unions, parts makers and the vehicle manufacturers’ association warned that cheaper Chinese EVs could undercut a domestic industry already squeezed by U.S. tariffs, and Ontario Premier Doug Ford was among the deal’s loudest critics.
That tension — farm exports today against auto jobs tomorrow — will follow the agreement as the first quota vehicles arrive and as Ottawa tries to convert Beijing’s investment promises into Canadian factories.
