China plans to propose easing restrictions on Canadian canola products during Prime Minister Mark Carney’s visit this week, provided Ottawa relaxes tariffs on Chinese electric vehicles, according to people familiar with the matter.
Chinese authorities prepared the proposal for discussions with Carney during his official visit, which began Monday and marks the first by a Canadian prime minister since 2017. Reducing levies on other Chinese industrial products is also part of the talks, the people said, asking not to be identified because they were not authorized to speak publicly.
The proposal sets up a potential trade-off that has divided Canada. Western provinces are pushing for canola relief while Ontario Premier Doug Ford warned Carney not to drop the EV tariffs, saying they protect 157,000 manufacturing jobs.
Sponsored · Granada Gold Mine
Canada imposed a 100% tariff on Chinese EVs in October 2024, aligning with US policy to protect North American auto manufacturing. China retaliated in March 2025 with 100% tariffs on Canadian canola oil, meal, and peas. Beijing escalated the dispute in August 2025, hitting canola seed with a 75.8% tariff that effectively closed the Chinese market to Canadian canola.
China is Canada’s second-largest canola buyer. Exports of seed, oil, and meal to China totaled $4.9 billion in 2024. The tariffs have hammered Prairie farmers, with canola futures falling $30.50 per tonne immediately after the August announcement.
Related: Ottawa taps Alberta channel to restart China trade
Government officials told the canola industry not to expect tariff elimination during Carney’s visit, according to three industry sources who spoke on condition of anonymity. Federal officials have asked grain traders to identify acceptable tariff rates, warning the sector to prepare for reduced rates at best.
Saskatchewan Premier Scott Moe is accompanying Carney on the trip, which ends Saturday and includes meetings with Chinese President Xi Jinping and Premier Li Qiang. Agriculture Minister Heath MacDonald and a large cabinet delegation are also attending.
Ford said Tuesday he plans to speak with Carney about his concerns. The Ontario premier suggested China could open a manufacturing facility in Canada instead of shipping vehicles, saying the country has the best auto workers in the world.
Even reduced tariffs may not restore Canadian competitiveness in China, some industry sources said. Canadian canola could remain uncompetitive even with reciprocal tariff cuts to 50%, as European and Australian products would retain advantages in the Chinese market, industry analysts said.
After China, Carney travels to Qatar on Saturday before attending the World Economic Forum in Davos, Switzerland, next week.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
