Canada opens its market to 49,000 Chinese cars a year in exchange for canola

Canada and China struck a deal on 16 January 2026 on tariff limits for electric cars and canola. Under the Canadian government's statement, up to 49,000 Chinese electric cars a year can enter the country at the most-favoured-nation rate of 6.1 percent. That volume matches import levels from the years before trade relations worsened (2023-2024) and accounts for less than 3 percent of Canada's new vehicle market.

The deal was announced during Prime Minister Mark Carney's visit to Beijing. It is the first trade agreement of its kind in his term. Ottawa expects Chinese companies to form joint ventures with trusted Canadian partners on a large scale within three years. Within five years, it expects more than half of those cars to cost less than 35,000 Canadian dollars. That would give consumers access to cheaper electric models.

Canola instead of a tariff

In return, China is to lower duties on Canadian canola. Ottawa assumes that from 1 March 2026 the rate will fall to around 15 percent from the current total of around 85 percent. China is a market worth 4 billion dollars for Canadian canola growers. From 1 March 2026 Canadian canola meal, lobsters, crabs and peas are to be exempt from related retaliatory tariffs at least until the end of the year. According to the Canadian government, these arrangements will unlock export orders worth close to 3 billion dollars.

The background is harsher. On 1 October 2024 Canada introduced a 100 percent tariff on all electric cars made in China, following the decision the United States had taken at the time. Before that surcharge, vehicles from China were subject to a rate of 6.1 percent. The new agreement is therefore a return to the level from before the tariff war, but in the form of a quota rather than a full opening of the market.

The arrangement shows a shift in Ottawa's strategy. Instead of keeping the tariff as a tool of political pressure, Canada traded market access for specific relief in agri-food exports. For Chinese EV makers it is the first opening onto the North American market in a long time, limited but real.