China and Canada bat for ‘new world order’, announce mutual tariffs relief

China and Canada announced lower tariffs and signalled a reset in their relationship after a key meeting of Chinese President Xi Jinping and Canadian Prime Minister Mark Carney in Beijing on Friday. Carney said the “world has changed dramatically,” and the Canada-China partnership sets the two countries up for a “new world order”. As per the deal, China is expected to lower levies on Canadian canola oil from 85% to 15% by 1 March, while Ottawa has agreed to tax Chinese electric vehicles at the most-favoured-nation rate of 6.1%, PM Carney told reporters. The deal between Ottawa and Beijing comes after years of strained ties and tit-for-tat levies. Xi hailed the “turnaround” in the relationship after PM Carney became the first Canadian leader to visit China in nearly a decade.

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Carney has been trying to diversify Canadian trade away from the country’s biggest trading partner, the United States, after Trump’s on-again-off-again tariffs led to uncertainty and stress.

‘Talks with Beijing both respectful and realistic’: Carney

The deal could have far more ramifications for US interests, as it promises more Chinese investments in Canada, right on America’s doorstep.

Carney hinted that the deal was a result of Trump’s tariffs, which have pushed a key ally of the US towards its biggest rival. He said Canada’s relationship with China had become more “predictable” recently, as he found talks with Beijing both “respectful and realistic”.

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He clarified that Ottawa does not agree with Beijing on everything and that he made clear Canada’s “red lines” to Xi, including human rights and concerns over election interference, during their discussions.

‘A new world order’

Carney said the “world has changed dramatically,” and Canada seeks to position itself in a way that will “shape our future for decades to come”.

Carney also said that the Canada-China partnership sets the two countries up for a “new world order”.

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As the delegations sat down in the Great Hall of the People on Friday, Xi said, “The healthy and stable development of China-Canada relations is conducive to world peace, stability, development, and prosperity.”

A reset of ties, and tariffs

In 2024, Canada imposed 100% tariffs on Chinese electric vehicles, following similar US curbs following which Beijing retaliated last year with tariffs on more than $2bn (£1.5bn) of Canadian farm and food products like canola seed and oil. As a result, Chinese imports of Canadian goods fell by 10% in 2025.

As per the deal struck on Friday, Canada will allow 49,000 Chinese electric vehicles into its market at the 6.1% tariff rate.

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The cap is in response to Canadian automakers' fears of an influx of affordable Chinese EVs.

Ahead of his visit to China, Carney said that Canada was focused on building a “more competitive, sustainable, and independent economy” in the face of “global trade disruption”.