Canada, China Ink Strategy Agreements

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

Eager to halve U.S. trade, Canada's prime minister made the first visit to Beijing since 2017. Both sides agreed to improve bilateral relations, with Canada bucking U.S. trends on EV protectionism.

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China Could Help Canada to Cut U.S. Trade

During the first visit for a sitting Canadian prime minister to China since 2017, Mark Carney said both sides have reset bilateral relations with an agreement on energy, clean technology and climate competitiveness.

Carney, a former central bank governor, met Friday with Chinese President Xi Jinping as part of broad-based meetings in Beijing. A five-point plan outlined in a joint statement includes everything from bilateral exchanges on financial matters to memoranda of understanding with the Department of Natural Resources of Canada.

"Leaders committed to strengthening the economic and trade partnership between Canada and China and welcomed progress in the negotiations to resolve trade issues," the joint statement read. "The two sides committed to expanding bilateral trade, strengthening two-way investment, and deepening cooperation in diverse sectors of mutual interest."

Carney is working to halve the amount of U.S. trade over the coming years after tariffs imposed by U.S. President Donald Trump led to a dramatic decline in bilateral relations. Though short on energy specifics, Canada could gain a foothold in the Asian economies with expanded deliveries of liquefied natural gas (LNG) from British Columbia to a new pipeline that would deliver heavy Albertan crude outside North America.

At home, Carney has also unveiled a list of national-priority projects that would support trade diversification, from the Ksi Lisims export terminal for LNG slated for Pearse Island off British Columbia to a nickel mine in Ontario.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can learn more--including capacities, investment values and necessary equipment--from detailed reports on Ksi Lisims and the mining project.

Canada already is delivering LNG to the Asian economies through the LNG Canada facility. Meanwhile, Alberta's provincial government is backing a new crude oil pipeline for British Columbia, which would complement the already-expanded Trans Mountain network.

Subscribers can learn more about LNG Canada in a plant profile.

China relies primarily on Russia for its crude oil supplies. Canadian deliveries have increased, though exports are historically less than 500,000 barrels per day (BBL/d). Canada may be keen on hastening west coast deliveries amid concerns that a potential rush of Venezuelan crude could limit its options in North America.

With a U.S. refining sector dependent on heavier crude oil slates, Canada accounts for about 60% of foreign oil deliveries to the U.S. economy, compared to about 3% for Venezuela.

By the Numbers

• Five-point bilateral plan outlined
• Canada proposed lower 6.1% tariff for Chinese EVs
• 500,000 BBL/d in Canadian oil could be set for China

Carney Welcome to Chinese EV Imports

Elsewhere, Carney in a further move away from the U.S. government, which is worried about competition from China, opted to reduce tariffs on Chinese electric vehicles (EV) in exchange for lower taxes on canola seeds imported from Canada by China.

Apart from soft lumber, low-carbon steel and energy, canola seeds are a major export resource for Canada. Tariffs on imported Chinese vehicles, meanwhile, drops from 100% to 6.1% under the terms of the trade arrangement.

Analysis from the International Energy Agency found that China leads globally in EVs. "China continues to be the world's EV-manufacturing hub and is responsible for more than 70% of global production," the Paris-based agency stated in a 2025 report.

Carney imposed a cap, however, on electric vehicle imports from China. But Ontario Prime Minister Doug Ford saw it as a blow to the domestic car industry.

"Make no mistake: China now has a foothold in the Canadian market and will use it to their full advantage at the expense of Canadian workers," he was quoted by various media outlets as saying. "Worse, by lowering tariffs on Chinese electric vehicles this lopsided deal risks closing the door on Canadian automakers to the American market, our largest export destination."

Subsidiaries of U.S.-based Ford Motor Company and General Motors have the largest plant footprint in Ontario.

Key Takeaways

• First visit by a Canadian PM since 2017
• Canada's Carney working to halve U.S. trade
• Ontario leader, others not happy about the trade arrangements

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).