As Prime Minister Mark Carney embarks on his visit to China, Canadian exporters and manufacturers are bracing for how the trip could shake up industries entangled in the tariff standoff between the two nations.
While Canadian farmers say they can no longer bear the economic strain after nearly a year of Chinese counter-tariffs on canola, pork, and seafood, the auto industry is keen to ensure that Canada makes no concessions on tariffs for Chinese-made electric vehicles.
“I’m hopeful that the engagement this week will be fruitful. Any progress would be welcomed,” said Scott Hepworth, chair of Grain Growers of Canada. “We need some certainty that China is going to be back in the market for Canadian canola.”
Carney’s trip to China, starting on Tuesday — the first by a Canadian prime minister since 2017 — is a high-stakes effort to repair the diplomatic rift that has deepened in recent years.
Ottawa’s attempt to secure relief for farmers hardest hit by China’s levies is expected to be met with Beijing pressing for a reduction of Canada’s 100 per cent tariffs on Canadian electric vehicles.
Canada is walking a tightrope as the talks come ahead of its own efforts to renegotiate the North American Free Trade Agreement with its closest trade partner, the U.S., which has adopted a hardline stance on barring Chinese EVs from the continent.
Hepworth said he does not want to pit the auto industry against the farmers and hopes that “there’s some common ground we could find in the middle that benefits both industries.”
“I want a solution. I want a compromise of some sort. Obviously, farmers in general, in Canada, are the ones taking the hit for this trade war that we have with China right now,” he said, adding that he is delighted to see Saskatchewan Premier Scott Moe join Prime Minister Mark Carney on the visit to China.
The agriculture industry is uncertain about how realistic it is to expect a full removal of China’s counter-tariffs on agri-food products, said Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance.
“I think realistic right now is for the relationship at the leader level to start up,” said Harvey. “It’s really early days after years of lack of contact, and for us, the leaders having this contact is a positive thing.”
Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, said he hopes there will be a warming of relations, but there should be no change to the tariff that Canada has put in place on Chinese EVs.
“I would not accept this tradeoff that China has tabled, that it has to be EVs for canola access. We don’t need Chinese EVs. They absolutely do need our agricultural exports,” said Kingston. “So I think we have to keep that in mind when we sit down at the table with China.
“Allowing Chinese EVs into the market would be extremely dangerous,” he added, “and put at risk our much more important relationship with the United States of America.”
Kingston is not alone in believing that Canada should keep the U.S. firmly in view as it seeks to diversify its trade partnerships, including with China. The two nations will enter a mandatory review of the Canada–U.S.–Mexico Agreement in July, which currently allows most Canadian products to enter the U.S. tariff-free.
“It’s great to start creating new pathways. But a lot of the effort needs to be undertaken to make sure we continue to improve our situation with the US,” said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.
Darby said Chinese components and parts are key inputs for Canadian manufacturers, who will be hoping Carney’s visit helps ensure the continued flow of Chinese products used to make Canadian goods.
“This is a significant visit,” said Gaphel Kongtsa, director of international policy at the Canadian Chamber of Commerce. “I think that signals a real interest in readjusting or refreshing the trading relationship with China.”
Kongtsa said that when it comes to EV discussions, Canada should not lose sight of the importance of its U.S. trading relationship and should keep security risks top of mind.
“It’s important to keep our options open with all of our trading partners, and in that sense, having these discussions with China, where even if we don’t arrive at a resolution to the problem of tariffs, we’re able to make some marginal improvements,” he said. “I think even that is a win for Canadian businesses.”
