Prime Minister Mark Carney is set to travel to China in a bid to move beyond years of diplomatic tensions and address a significant trade issue — Canada’s high tariffs on Chinese electric vehicles and China’s retaliatory agricultural levies. The Chinese ambassador to Canada has suggested that if Canada eliminates its EV tariffs, China would reciprocate by dropping its own tariffs.
An unnamed Canadian official expressed optimism about making progress during the Beijing visit but cautioned that a definitive removal of China’s perceived unfair tariffs might not be immediate. Vina Nadjibulla, the Vice President of Research and Strategy at the Asia Pacific Foundation of Canada, anticipates some positive signals regarding the direction of negotiations.
Carney’s visit to Beijing, spanning four days, marks the first trip by a Canadian Prime Minister since 2017. This visit is part of Canada’s effort to diversify trade beyond the U.S., re-engaging with China after a strained period that included the detention of two Canadians by Beijing.
According to a recent public inquiry, Beijing has been identified as a prominent actor in foreign interference in Canada, utilizing proxies and diplomatic channels to influence the diaspora community. Nadjibulla describes Carney’s visit as a crucial moment in Canada-China relations, emphasizing the need for strategic decision-making to manage potential risks.
The decision on Canada’s EV tariffs could impact negotiations with the U.S. regarding the renewal of the Canada-U.S.-Mexico agreement (CUSMA) this year. Nadjibulla suggests that dropping tariffs could be part of talks with the U.S., but Canada also has the option to impose specific tariffs on Chinese EVs based on factors like government subsidies and adherence to trade rules.
Discussions during Carney’s trip may extend to areas beyond EVs, such as canola, autos, and oil. Saskatchewan Premier Scott Moe, whose province has been affected by China’s tariffs, is expected to accompany Carney on parts of the trip. New agreements are anticipated to be signed during Carney’s meetings with Chinese President Xi Jinping.
Canada is also exploring opportunities to expand its petroleum and liquefied natural gas markets, particularly in China. Nadjibulla highlights the potential for China to increase its demand for Canadian crude, especially considering recent developments affecting another major fossil fuel supplier, Venezuela.
However, concerns have been raised by Dennis Molinaro, a former national security analyst, regarding the need for enhanced measures against foreign interference in Canada before engaging with China. He advocates for the establishment of a foreign agency registry and a foreign interference commissioner to address these issues.
As Carney looks to strengthen ties with China, he is also scheduled to visit Qatar to attract investment from the Middle East and attend the World Economic Forum in Switzerland. The trip is seen as a positive step towards maintaining open communication channels with Beijing, despite existing challenges in the relationship.