Carney agrees to high-level talks with Beijing on resolving Canada-China trade war

Globe and Mail

06-06-2025

Prime Minister Mark Carney and his Chinese counterpart agreed Thursday to 'regularize channels of communication' in Canada's estranged relationship with China and hold talks to resolve a trade war affecting billions of dollars of trade between the two countries.
Mr. Carney and Chinese Premier Li Qiang also agreed to further cooperate on fighting illegal production of the opioid fentanyl.
It was Mr. Carney's first conversation with Chinese leadership since becoming Prime Minister, his office said.
They agreed to convene deputy-minister level talks to try to tackle a damaging trade war.
Canada and China are locked in this conflict that was triggered by Ottawa's decision in 2024 to follow the Biden administration in imposing 100-per-cent tariffs on Chinese-made electric vehicles. Canada also enacted a 25-per-cent tariff on Chinese steel and aluminum.
China responded in 2025 with retaliatory tariffs on Canadian canola oil and meal, peas and seafood.
The conflict is hurting Western Canadian farmers as well as seafood producers in Atlantic Canada and British Columbia.
The bilateral relationship with China has not yet recovered from a rupture more than six years ago when Canada arrested a Chinese tech executive at the request of the U.S. government and Beijing retaliated by jailing two Canadians for nearly three years in a move one cabinet minister called 'hostage diplomacy.'
Mr. Carney is facing pressure from Canadian premiers to get the Chinese tariffs lifted, and Canada wants China's help in ensuring precursor chemicals used in the illegal production of the opioid fentanyl do not reach this country.
'The leaders exchanged views on bilateral relations, including the importance of engagement, and agreed to regularize channels of communication between Canada and China,' the Prime Minister's Office said in a readout released Thursday.
It said the two countries have agreed to convene the Joint Economic and Trade Commission (JETC), a deputy-minister level consultation mechanism, at an early date 'to address outstanding trade issues.' The JETC exists to promote trade between Canada and China.
'Prime Minister Carney took the opportunity to raise trade irritants affecting agriculture and agri-food products, including canola and seafood, as well as other issues, with Premier Li,' the PMO said.
'The leaders took note of recent bilateral engagement on fentanyl and other opioids, and committed their governments to working together to address the fentanyl crisis.'
Efforts to repair relations with China, Canada's second largest export market, come as the United States is seeking help from allies including Canada in its rising competition with China. Last month, U.S. State Department spokesperson Tammy Bruce told a media briefing in Washington that the U.S. government also wants Ottawa's help in 'countering the Chinese Communist Party influence in our hemisphere.'
In an interview with The Globe and Mail this week, China's ambassador to Canada Wang Di said Canada's 100-per-cent tariffs on Chinese electric vehicles are preventing the sort of investment here that has led to new auto-sector factories and jobs in Europe and Asia, and warned that the Trump administration's call for Ottawa to join forces against Beijing represents an outdated 'Cold War mentality.'
Canadian and American officials said the steep tariffs on Chinese EVs were necessary to protect domestic auto sectors from these lower-priced vehicles that were being overproduced and flooding global markets, alleging Beijing subsidizes its EV makers.
Canada's auto sector is heavily dependent on its American counterpart. Since the EV tariffs on China, however, Mr. Trump has said he doesn't want Canada making cars for his country and wants auto production moved inside U.S. territory.
Mr. Wang, the Chinese ambassador to Canada, said Tuesday that Chinese EV makers were previously interested in investing in Canada but the 100-per-cent tariffs had discouraged them from doing so.
'Let's find a solution quickly to remove these tariffs so that we can focus more on how we can strengthen our co-operation together,' he told The Globe.
'China's EV industry has the world-leading technology. And Canada has a very good foundation in terms of automaking industry,' he said. 'That means we have great complementarities in this area.'
He noted Chinese battery maker Contemporary Amperex Technology Co. Ltd. is partnering with Ford Motor Co. to build a US$3.5-billion EV battery plant in Michigan, and Spanish vehicle maker Ebro-EV Motors and China's Chery Automobile have begun vehicle production in a joint venture in Barcelona. Geely Auto, another Chinese producer, is also looking at setting up a factory in Spain to serve the European market, he said, while BYD has set up a plant in Thailand.
The European Union, which also imposed tariffs on Chinese EVs, has been in negotiations with Beijing for months on resolving its trade war with China.
China's ambassador has made diplomatic inroads with one of the provinces hurt by Beijing's retaliatory tariffs. Mr. Wang said he met with Saskatchewan Premier Scott Moe and members of his cabinet the week of May 12.
During a press conference with Mr. Carney following the Prime Minister's meeting with Canadian premiers on June 2, Mr. Moe told reporters he wants this country to secure a broader trading relationship with Beijing.