Canadian Prime Minister Mark Carney is traveling to China as the two countries seek to reset trade relations following last year’s US-driven tariff scenario.
During the visit, Carney is expected to meet with several senior Chinese government officials, including President Xi Jinping.
In a post on X on Tuesday, the Prime Minister noted that “China is our second-largest trading partner, and the world’s second largest economy.”
“A pragmatic and constructive relationship between our nations will create greater stability, security, and prosperity on both sides of the Pacific,” he added.
According to local media outlet the Toronto Star, Canada and China are in “active discussions” about lowering tariffs on Chinese-made EVs as well as Canadian canola and seafood.
China imposed agricultural tariffs last year in retaliation for Canadian levies on Chinese EVs. The country imposed a 100% duty in 2024, similar to the US.
Hours before the visit, China announced that its imports from Canada fell in 2025, marking the first decline since 2020.
According to data cited by Reuters, imports from Canada dropped 10.4% to $41.7 billion, down from a record high the previous year.
Unlike former PM Justin Trudeau, Carney has been improving relations with the United States, even as trade talks aimed at easing tariffs on Canadian steel, aluminum, and vehicles remain stalled.
Last September, the Prime Minister paused the Electric Vehicle Availability Standard (ZEV) for 2026, as the government reevaluates the policy on EV adoption targets.
The move was one of the several measures that the Government announced to help automakers navigate the tariff climate.
Government officials have declined to say how the China visit could influence Canada’s trade relationship with the US, which shows opposition to the entry of Chinese EVs into North America.
Chinese EVs in America
Several Chinese automakers have expanded into the American continent by first establishing a presence in the South.
Some have gone a step further by producing vehicles within the region — such as BYD, which began manufacturing in Brazil last year — significantly reducing the cost of exporting vehicles to the continent.
XPeng, which doubled its overseas presence in 2025, entered Guatemala, Uruguay and Colombia last year.
In November, Nio teased the expansion of its more affordable Firefly sub-brand to North America for the first time, a few months after revealing that it would debut in Costa Rica this year.
The company has halted plans to enter the US, as exclusively reported by EV last year.
While the EV maker never indicated any plans to enter Canada, that possibility could now be inferred.
USMCA
The North American nations are currently discussing the renewal of the free trade pact — the USMCA or ‘United States–Mexico–Canada Agreement’ — celebrated in 2018.
The agreement was then signed by President Trump, during his first term, and the former Canadian PM Justin Trudeau.
Speaking about the free trade pack on Tuesday, however, Trump said it is “irrelevant” to the US.
“There’s no real advantage to it, it’s irrelevant,” the President said, adding, however, that “Canada would love it. Canada wants it. They need it.”
Trump’s 25% Tariffs on Autos
Last year, the Trump Administration clarified that auto parts that met USMCA rules wouldn’t have to pay the 25% tariff.
However, Canadian-manufactured vehicles that don’t qualify for duty-free trade under USMCA had their tariff raised from 25% to 35%.
Several US automakers still rely on production in Canada, like Detroit automakers General Motors and Ford.
Since the tariff announcement last April, several layoffs have been reported in GM‘s Canadian factories.
Reuters reported that production in GM‘s Oshawa assembly plant had been cut back due to low demand and trade-related issues last May.
Later last year, the Mary Barra-led company also halted production of its electric delivery van, which was produced in Canada.
This recent decision was not only connected with the tariff scenario, but also to its EV business restructure.
