Canada's Strategic Deal with China Reflects Shift from US Dependency

Sat Jan 17 2026 17:21:12 GMT+0200 (Eastern European Standard Time)

In a bold move, Canadian Prime Minister Mark Carney has announced a new trade deal with China aimed at recalibrating Canada's foreign policy amidst ongoing uncertainties with the United States. The agreement, which involves easing tariffs on electric vehicles and agricultural products, signifies a significant departure from Canada's traditional reliance on its southern neighbor.

Canada has struck a landmark deal with China, easing tariffs on Chinese electric vehicles and agricultural exports, while China agrees to lower tariffs on Canadian goods. Prime Minister Mark Carney's approach signifies a major shift in Canada's trade policy, highlighting a growing independence from US economic influence. The move has sparked mixed reactions domestically, with agriculture stakeholders welcoming it while others express concern over potential impacts on Canadian industries.

Prime Minister Mark Carney's new approach to Canada's foreign policy can perhaps be distilled in one line: We take the world as it is, not as we wish it to be. That was his response when asked about the deal struck with China on Friday, despite concerns over its human rights record and nearly a year after he called China the biggest security threat facing Canada.

The deal will see Canada ease tariffs on Chinese electric vehicles that it imposed in tandem with the US in 2024. In exchange, China will lower retaliatory tariffs on key Canadian agricultural products.

Experts told the BBC the move represents a significant shift in Canada's policy on China, one that is shaped by ongoing uncertainty with the US, its largest trade partner. The prime minister is saying, essentially, that Canada has agency too, and that it's not going to just sit and wait for the United States, said Eric Miller, a Washington DC based trade adviser and president of the Rideau Potomac Strategy Group.

Carney told reporters on Friday that the world has changed in recent years, and the progress made with China sets Canada up well for the new world order. Canada's relationship with China, he added, had become more predictable than its relationship with the US under the Trump administration.

In Canada, reactions to the deal were swift. Some, like Saskatchewan Premier Scott Moe, hailed it as very good news, while Ontario Premier Doug Ford criticized the decision, warning it could lead to job losses in the automotive sector. Experts suggest that the deal could enable Chinese electric vehicles to capture a growing share of the Canadian market, raising concerns among local manufacturers.

The agreement drops Canada's levies on Chinese EVs from 100% to 6.1% for the first 49,000 vehicles imported each year. This quota could increase significantly over the next few years, allowing Chinese manufacturers a stronger foothold in Canada, while bringing potential benefits to Canadian consumers via lower EV prices.

As the economic landscape evolves, this deal marks a pivotal moment for Canada as it navigates its relations with both China and the United States, signaling a move towards greater economic diversification.