In a significant shift in international relations, Canada and China signed a comprehensive energy and trade cooperation agreement. The deal was announced during Canadian Prime Minister Mark Carney's four-day visit to Beijing, the first by a Canadian head of government since 2017 just months after U.S. President Donald Trump imposed tariffs on Canada.
At the heart of the agreement is a new energy cooperation framework designed to expand commercial and policy engagement between Ottawa and Beijing. China and Canada committed to regular ministerial-level energy dialogues every 12 to 18 months to deepen cooperation on both traditional and low-carbon energy sectors, including renewable technologies, oil and gas trade, and climate innovation. The talks are intended to create stable platforms for ongoing coordination in a volatile global energy market.
Prime Minister Carney and Chinese leaders also signed multiple related memorandums of understanding (MOUs) covering a range of sectors from forestry and food safety to cultural exchange and crime prevention, underscoring the breadth of the renewed partnership. Carney described the energy cooperation as a "pillar" of the broader strategic relationship and highlighted its potential for job creation and investment on both sides of the Pacific.
Chinese President Xi Jinping himself said that relations between Ottawa and Beijing made a significant improvement after the Apec summit in South Korea in October. There, Xi reportedly invited Carney to China personally after years of tension with Carney's predecessor, Justin Trudeau.
Now the enmity towards Beijing seems to have subsided as the deal reportedly comes as Ottawa pushes to diversify Canada's export markets after Trump put tariffs on Canada and floated plans to make it the 51st state of the United States. The two bordering nations seem to be at odds, and Trump, on his part has shown disinterest in renewing the United States-Mexico-Canada trade agreement as he pushes to move manufacturing back on American soil.
A central economic component of the visit was the trade and tariff framework agreed between Canada and China. Canada signaled major changes to its tariff regime: reducing the duty on Chinese electric vehicles (EVs) from an effective rate of roughly 100% to a most-favoured-nation (MFN) rate of 6.1% for up to 49,000 vehicles annually, with a planned increase to about 70,000 vehicles over five years.
In return, China slashed tariffs on Canadian canola seed from roughly 84% to about 15%, effective March 1, 2026, alongside reductions on other agricultural exports such as canola meal, lobsters, peas and crabs. Ottawa's official backgrounder on the preliminary trade agreement notes that the tariff changes and expanded market access are expected to "significantly improve market access" for Canadian agricultural goods valued in the billions annually.
