Canada and China Extend Trade Deal Through 2028

Canada and China reached an agreement on Wednesday to extend a trade arrangement until the end of 2028. The deal ensures continued Chinese market access for Canadian canola meal, peas, lobster, and crab by pausing tariffs that had reached as high as 100 percent. In exchange, Canada will extend market access and remission measures for specific Chinese steel and aluminum products not produced domestically.

Mark Carney, the Prime Minister of Canada, established the foundation for this agreement during a January visit to Beijing. That initial strategic partnership reduced canola seed tariffs from 100 percent to approximately 15 percent for five years and restored market access for Canadian beef. As part of broader trade reconciliation, Canada also agreed to allow up to 49,000 Chinese electric vehicles into its market annually at a reduced tariff rate of 6.1 percent.

Trade Minister Maninder Sidhu announced the extension following a Joint Economic and Trade Commission meeting in Beijing, the first such meeting held at the ministerial level. Sidhu noted that the deal has already driven an 84 percent increase in canola seed exports and supports a government goal to grow exports to China by 50 percent by 2030. This push to diversify trade is part of a strategy to double non-U.S. exports over the next decade.

Diplomatic activity continues with Chinese Vice Premier He Lifeng scheduled to visit Vancouver next week to meet with financial regulators. Prime Minister Carney also plans to visit Shenzhen for the Asia-Pacific Economic Co-operation summit to focus on boosting Chinese investment.