Canada’s China Deal Signals a Strategic Shift Away From U.S. Dependence

Electric vehicles await export at a Chinese port as Canada moves to ease tariffs in a landmark trade deal with Beijing.

A New Foreign Policy Philosophy Under Mark Carney

Canadian Prime Minister Mark Carney’s evolving foreign policy approach can be summed up in a single line: “We take the world as it is, not as we wish it to be.” That philosophy was put into action this week as Canada finalized a controversial trade deal with China, signaling a clear recalibration of its global strategy.

The agreement, announced Friday, eases Canadian tariffs on Chinese electric vehicles while securing relief for Canadian agricultural exports hit by Beijing’s retaliatory measures. It comes despite longstanding concerns about China’s human rights record and just months after Carney publicly described China as Canada’s “biggest security threat.”

What the Canada-China Deal Includes

Under the deal, Canada will reduce tariffs on Chinese electric vehicles from 100% to 6.1% for the first 49,000 vehicles imported annually. That quota could rise to 70,000 within five years.

In return, China will sharply lower tariffs on key Canadian agricultural products. Canola seed tariffs will fall from 84% to roughly 15% by March, while duties on canola meal, lobster, crab, and peas will be suspended at least through the end of the year. China also committed to removing visa requirements for Canadian travelers.

A Move Driven by U.S. Uncertainty

Trade experts say the agreement reflects growing uncertainty in Canada’s relationship with the United States, historically its largest and most reliable trading partner.

Since returning to office, U.S. President Donald Trump has imposed new tariffs on Canadian metals and automotive products and has threatened to dismantle the USMCA free trade agreement. That agreement is now under mandatory review, leaving Canada exposed to future trade disruptions.

“Canada is asserting that it has agency,” said Eric Miller, a Washington-based trade adviser. “Ottawa is preparing for a world where the U.S. may no longer be a dependable economic anchor.”

Mixed Reaction at Home

Reaction within Canada has been divided. Saskatchewan Premier Scott Moe praised the deal, calling it “very good news” for farmers devastated by Chinese tariffs on canola.

Ontario Premier Doug Ford, however, warned that easing EV tariffs could hurt Canada’s auto sector and lead to job losses. He accused the federal government of opening the door to a flood of low-cost Chinese vehicles without securing meaningful domestic investment.

Impact on Canada’s Auto Market

Experts estimate that Chinese automakers could soon capture around 10% of Canada’s EV market. While that could mean lower prices for consumers, it also poses challenges for North American manufacturers seeking to expand their footprint.

“Carney has signaled to Washington that Canada is warming up to China,” said McGill University professor Vivek Astvansh. “That alone reshapes the geopolitical landscape.”

Washington’s Divided Response

U.S. reaction has been mixed. Trade Representative Jamieson Greer called the deal “problematic,” warning Canada may regret the move. President Trump, however, welcomed it.

“If you can get a deal with China, you should do that,” Trump said, even suggesting Chinese investment could be welcome if it creates jobs.

A Recalibration, Not a Break

Carney insists the deal does not represent an abandonment of Canada’s allies, but rather a pragmatic response to a changing world order. He has framed the agreement as part of a broader effort to diversify trade relationships and protect Canada from economic volatility.

“The world has changed,” Carney said. “Canada must be ready.”

As global trade alliances shift and North American certainty fades, Canada’s China deal may be the first of several moves designed to ensure long-term economic resilience.