by Key Meeting Points
Historic Meeting After Seven Years
For the first time in seven years, a Canadian prime minister met with Chinese leadership. Mark Carney and Xi Jinping held talks on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju, South Korea. Billions in trade are at stake, but Carney hinted that the trade deal many are hoping for may not be reached, at least not during this first face-to-face meeting.
The Issue of Electric Vehicle Tariffs
Ahead of the meeting, reports emerged that Canada might be ready to cancel the 100% tariff on imported Chinese electric vehicles imposed in 2024. Canada is under pressure to meet environmental goals, and access to more affordable electric vehicles could help. However, the real pressure to cancel EV tariffs comes from Canadian farmers.
Impact on the Agricultural Sector
Canada’s rapeseed industry is worth billions of dollars, with a significant portion of revenue coming from China. However, exports to China plummeted after the Chinese imposed a 75.8% tariff on rapeseed in response to the EV tariffs. A seemingly simple handshake of “you cancel your tariffs, and I’ll cancel mine” could solve everything, but it’s not that straightforward.
Position of Canadian Leadership
Carney was careful not to claim that he expects to return from this first meeting with a ready trade deal. He told reporters before the meeting:
“We will explore what we can build. This is our second-largest trading partner. It is the second-largest economy in the world.”
He added:
“There is no predetermined proposal. That’s the difference between a relationship and a deal,”
explaining that the relationship between the two countries needs “deepening” and that besides electric vehicles, there are many other topics for discussion.
Concerns of the Canadian Auto Industry
Another reason Carney may hesitate to cancel EV tariffs is concern for the well-being of the Canadian automotive industry. The sector is already suffering from US President Donald Trump’s tariffs, and the current strained relations between the US and Canada are unlikely to resolve these issues soon. The last thing it needs is an influx of low-priced Chinese competitors.
This meeting takes place at a particularly complex moment for global trade, as countries attempt to balance economic interests, environmental commitments, and political realities. Canada’s decision on electric vehicle tariffs could have far-reaching consequences not only for bilateral relations with China but also for domestic economic policy and international trade dynamics as a whole. The farming community continues to be an important political factor influencing trade decision-making.
