Canada-China deal may open door to EV imports and farm exports

Canada and China reached a preliminary agreement that would allow up to 49,000 Chinese electric vehicles into Canada at about a 6% tariff and ease Chinese duties on some Canadian canola, with tariff reductions for canola meal and seed reported to take effect March 1.

Canada and China have reached a preliminary trade agreement aimed at reducing certain tariffs and restoring some agricultural trade. The agreement would allow a limited number of Chinese electric vehicles into Canada at a tariff of just over six per cent. In return, China would ease duties on some Canadian agricultural products, notably canola meal and canola seed. The discussion follows earlier measures: Canada imposed 100 per cent tariffs on Chinese electric vehicles in 2024 and China responded with tariffs on canola, pork and seafood. Key points: - The agreement would allow up to 49,000 Chinese electric vehicles into Canada at a tariff just over six per cent. - That volume is under three per cent of Canada’s annual auto sales, which are about 1.9 million vehicles. - Canada imposed 100 per cent tariffs on Chinese EVs in 2024 and China retaliated with tariffs on several Canadian agricultural goods. - Tariff reductions for canola meal and canola seed are reported to take effect March 1; canola oil was not addressed in the details released so far. - William Pellerin, a partner and international trade lawyer at McMillan, said Chinese EVs’ price and quality could shift perceptions and that some stakeholders hope manufacturers might eventually invest in Canada. - The United States’ response is uncertain; the interview referenced a recent comment from President Trump that the U.S. "doesn't need Canada on autos." Summary: The reported deal could reopen important agricultural markets for Canadian producers and modestly broaden consumer access to Chinese electric vehicles while keeping near-term import volumes limited. Tariff reductions for canola meal and seed are expected to begin March 1, and details on other products and longer-term arrangements remain to be announced. Negotiations around Canada-U.S. trade ties and any future investment decisions by Chinese producers are among the next developments referenced in the discussion.