Canada is betting on a faster reset with China after months of trade disruption that hit farmers, seafood exporters, and the wider supply chain.
During Prime Minister Mark Carney’s visit to China this week, Ottawa said it expects Beijing to cut tariffs on Canadian rapeseed, known locally as canola, by March 1.
The shift would ease a rift that has effectively shut Canadian canola out of one of its most important markets.
At the same time, Canada is offering China a limited pathway for electric vehicle exports into the Canadian market, signalling a broader attempt to lower tensions while keeping sensitive domestic sectors in mind.
Canola tariffs could fall by March 1
Carney said Canada expects China to lower tariffs on Canadian canola seed by March 1 to a combined rate of about 15%.
He also said China will suspend duties on other farm products, including canola meal and lobsters.
The move follows months of talks aimed at mending ties after a series of trade actions on both sides.
China had previously imposed heavy penalties on Canadian canola and related products, leaving exporters with fewer options and adding pressure as supplies stayed ample.
The final decision on levies tied to China’s investigation has also been extended until March 9.
A market worth billions has been frozen
The canola dispute has carried an outsized cost for Canada’s crop sector.
The tariffs effectively closed the Chinese market to Canadian canola and its products, freezing trade valued at C$4.9 billion ($3.5 billion) in 2024.
That shutdown has weighed on growers and exporters, particularly as alternative destinations have been limited.
If China follows through with the planned reductions and suspensions, the deal could reopen trade routes that were a major source of demand before the dispute escalated.
Carney also described China as a $4-billion canola seed market for Canada.
Canada opens a narrow door to Chinese EVs
The agreement also includes a major adjustment to electric vehicles.
Carney said Canada will initially allow up to 49,000 Chinese EVs into its market at a tariff of 6.1% on most-favoured nation terms.
He did not specify a time period.
This would mark a sharp shift from the 100% tariff Canada imposed on Chinese EVs in 2024, under former Prime Minister Justin Trudeau, after similar penalties by the US. In 2023, China exported 41,678 EVs to Canada.
Trudeau defended the 2024 tariff by pointing to advantages Chinese manufacturers gain through state subsidies, which Ottawa argued threatened the domestic industry.
The 2024 measures also included tariffs on Chinese steel and aluminium.
Pressure rises as Canada diversifies away from the US
Carney has been pushing to reduce Canada’s reliance on the US after President Donald Trump imposed sweeping tariffs.
Canada is now working to strengthen ties with its second-largest trading partner after the US, following months of diplomatic efforts.
China’s retaliation to Canada’s 2024 actions included tariffs on more than $2.6 billion of Canadian farm and food products last March, followed by tariffs on canola seed in August.
That contributed to a 10.4% slump in China’s 2025 imports of Canadian goods.
Carney said Canada expects canola meal, as well as lobsters, crabs, and peas, to be freed from anti-discrimination tariffs from March 1 until at least year-end.
He added that the deals could unlock nearly $3 billion in export orders.
“In terms of the way our relationship has progressed in recent months with China, it is more predictable, and you see results coming from that,” Carney said when he was asked if China was a more predictable partner than the US.
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