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

Canada and China struck a deal on 16 January 2026 regarding tariff limits on electric cars and canola. According to the Canadian government, up to 49,000 Chinese electric cars can enter the country each year at the most-favoured-nation rate of 6.1 percent. This 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 agreement was announced during Prime Minister Mark Carney's visit to Beijing. It is the first trade deal of its kind in his term. Ottawa expects Chinese companies to form large-scale joint ventures with trusted Canadian partners within three years. Within five years, more than half of these cars are expected to cost less than 35,000 Canadian dollars, giving consumers access to cheaper electric models.

Canola instead of tariffs

In exchange, China will lower duties on Canadian canola. Ottawa anticipates that from 1 March 2026, the rate will drop to around 15 percent from the current total of approximately 85 percent. China is a market worth 4 billion dollars for Canadian canola producers. Starting 1 March 2026, Canadian canola meal, lobsters, crabs, and peas will be exempt from related retaliatory tariffs at least until the end of the year. The Canadian government states these arrangements will unlock export orders worth nearly 3 billion dollars.

The context is starker. On 1 October 2024, Canada introduced a 100 percent tariff on all electric cars made in China, following a similar decision by the United States. Before this surcharge, vehicles from China were subject to a 6.1 percent rate. The new agreement thus returns to pre-tariff-war levels, but as a quota rather than a full market opening.

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