Canada, China hit reset button on relations with tariff agreement

South China Morning Post Economic ImpactNews ReportEN 2 min read 100% complete by Ji Siqi,Sylvia Ma,Dewey SimJanuary 16, 2026 at 10:08 AM

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Canada and China have agreed to ease trade tensions by removing recently imposed tariffs on key imports. The agreement, reached during Canadian Prime Minister Mark Carney's visit to Beijing, involves Canada removing its 100% tariff on Chinese electric vehicles (EVs) implemented in 2024. In return, China will lower tariffs on Canadian canola. Instead of high tariffs, Canada will implement a quota of 49,000 EV imports annually, subject to a preferential tariff rate of 6.1%. The goal is to foster partnerships, attract Chinese investment in Canada's auto sector, and lower EV costs for Canadians while protecting Canada's developing EV industry. The quota roughly corresponds to pre-tariff EV import levels.

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Key Claims (5)

AI-Extracted

The 49,000-unit limit on EV imports roughly corresponds to shipments made from China to Canada in the year before the tariff increases.

factual — prime minister’s office100% confidence

Canada will cap import volume of EVs and retain a preferential tariff rate of 6.1 per cent for shipments below the 49,000-unit ceiling.

factual — Carney100% confidence

China will lower its tariffs on Canadian canola.

factual — Carney100% confidence

Canada will remove the additional 100 per cent in tariffs it had levied on Chinese electric vehicle (EV) imports.

factual — Carney100% confidence

It’s expected that, within three years, this agreement will drive considerable Chinese investment in Canada’s auto sector.

prediction — Carney80% confidence

Claims are automatically extracted and should be independently verified. Attribution indicates the stated source of the claim.

Key Entities & Roles

Key Player Opposition Context

Beijing 40% United States 50% Xi Jinping 60% Mark Carney ×380% Canada ×890% China ×690%

Keywords

canada-china relations 100% tariffs 90% electric vehicles 80% trade agreement 70% import quota 60% investment 50% supply chains 40% net-zero future 40%