Xi and Carney Reset Ties: Canada China EV Tariff Relief Sparks New Trade Era

The North American trade wall just cracked. In a bold move that's sent ripples through Washington, Canadian Prime Minister Mark Carney and Chinese President Xi Jinping have agreed to a major de-escalation of trade tensions. The centerpiece of this diplomatic thaw is a significant reduction in tariffs on Chinese electric vehicles (EVs).

Strategic Pivot: Canada China EV Tariff Relief and Global Trade

According to Reuters, during their meeting in Beijing on January 16, 2026, both leaders committed to a "new type of strategic partnership." This rapprochement aims to mend years of strained relations by focusing on trade diversification in energy, technology, and agriculture. Canada's decision to offer tariff relief to Chinese automakers marks a sharp departure from the coordinated Western effort to limit Beijing's reach in the green tech sector.

Balancing Act Between Giants

Carney's pitch emphasizes economic survival through diversification. As global trade becomes increasingly fragmented, Ottawa is looking for ways to insulate itself from US-centric trade volatility. However, the move is a gamble; while it secures cheaper EVs for Canadian consumers and opens doors for Canadian oil and tech, it places the country directly in the crosshairs of the US-China tech war.