A Major Policy Shift: Canada Reduces Tariffs on Chinese EVs from 100% to 6.1%
In mid-January, Canadian Prime Minister Carney paid an official visit to China. During the visit, both sides reached broader consensus on deepening economic and trade relations and released a joint roadmap titled “China–Canada Economic and Trade Cooperation Framework”. The two countries also outlined initial arrangements regarding bilateral trade issues, including new adjustments to tariffs involving electric vehicles and agricultural products.
Tariff on Chinese EV Imports Lowered to 6.1%
According to reports from international media outlets including AFP and The New York Times on January 16, Canada will reduce import tariffs on certain Chinese electric vehicles. Up to 49,000 Chinese EV units will be allowed to enter the Canadian market annually at a Most-Favored-Nation (MFN) tariff rate of 6.1%, returning to the pre-trade-dispute level.
The Chinese Ministry of Commerce confirmed that within the quota, Chinese EVs will no longer face the additional 100% surcharge. The quota will expand gradually over the coming years based on bilateral consultations.
Canada noted that the quota corresponds roughly to the volume of Chinese EV exports to Canada prior to the trade friction period (2023–2024), representing less than 3% of Canada’s domestic auto market.
Prime Minister Carney stated that Canada plans to strengthen cooperation with China in fields such as clean energy storage and production, aiming to attract further investment into the Canadian EV and energy sectors.
“Over the next three years, this agreement is expected to drive large-scale Chinese investment into Canada’s automotive industry, create high-quality jobs, and accelerate Canada’s path toward net-zero emissions,” he said.
Carney emphasized that to build a competitive domestic EV industry, Canada must engage innovative partners, integrate into global supply chains, and expand domestic market demand.
Adjustments to Agricultural Trade: Oilseeds & Seafood Included
Agricultural products were another highlight of the discussions. Canada expects China to lower the composite tariff on Canadian canola seeds to approximately 15% by March this year. In addition, Canadian canola meal, lobster, crab, and pea products will temporarily be exempt from Chinese countermeasures starting in March until at least the end of the year.
Canadian media noted that the adjustments will help farmers and agricultural exporters plan for the spring planting season. Carney also mentioned that China will implement visa-free entry for Canadian citizens, though Chinese authorities have not officially confirmed this.
Carney expressed optimism, saying the agreements could unlock nearly USD 3 billion in export opportunities for Canadian farmers, fishermen, and food processors.
“China used to be the largest export market for Canadian canola,” he said. “Our goal is not only to restore past volumes but to surpass them.”
Future cooperation could extend to grains, pulses, seafood, pork, and pet food products.
Bilateral Currency Swap Extended: RMB 200 Billion, Five-Year Term
On January 16, the People’s Bank of China announced that the central banks of China and Canada renewed their bilateral currency swap agreement. With approval from China’s State Council, the swap line was renewed for RMB 200 billion (equivalent value in CAD), with a validity period of five years and the possibility of extension upon mutual consent.
According to the People’s Bank of China, the renewal will strengthen financial cooperation, support bilateral trade and investment, expand the use of local currencies, and contribute to financial market stability.
Conclusion
The latest adjustments mark a significant easing in China–Canada trade relations, particularly in the EV and agricultural sectors. With tariff reductions, quota allocations, and renewed financial cooperation mechanisms, both sides signal a pragmatic path toward stabilizing and expanding bilateral economic engagement.
For businesses in manufacturing, supply chains, agriculture, clean energy, and automotive sectors, these developments provide new trade opportunities and strategic considerations for market access and cross-border investment.
