Canada-China Accord: Defusing the Chinese Syndrome
The recent Canada-China Accord aims to defuse the escalating tensions between Canada and China, primarily in the realm of trade. This agreement, reached between Prime Minister Mark Carney and Chinese officials, addresses critical issues that have strained the economic relationship.
Background of the Canada-China Trade Tensions
In August 2024, the Canadian government imposed a 100% tariff on exports of Chinese vehicles. This action prompted China to retaliate with tariffs of 75% on canola seed imports and 100% on Canadian canola oil. The escalating tariff war has deepened the economic rift initiated after the 2018 arrest of Huawei’s CFO and two Canadians in China.
Significance of the Accord
The accord signifies Canada’s urgent need for stable relationships with its primary trading partners. With tensions already high between Canada and the U.S., diversifying export markets became essential. Notably, Canada imports three times more than it exports to China, despite China importing around $30 billion in Canadian goods annually.
Trade Dynamics in Quebec
In Quebec, China ranks as the second-largest trading partner. As of the second quarter of 2025, trade with China constituted approximately 8.3% of Quebec’s total trade. This figure comes behind the U.S., which dominates trade at 44.7% of the province’s international commerce.
China’s Economic Position
Over the past 30 years, China has emerged as a major global economic power. Since the late 1990s, it has become a hub for inexpensive manufacturing. This shift has allowed North American and European companies to outsource production and focus on higher-value goods. Importantly, during the 2000s, China marginalized Quebec’s textile and footwear industries.
The Impact of the Accord on Canadian Exports
The recent agreement includes a reduction in tariffs on Canadian canola and the removal of tariffs on seafood and peas. In exchange, Canada agreed to a limited importation of Chinese electric vehicles. This step is crucial for repairing the damaged trade relations.
Notably, the pork producers in Quebec are still hoping that the 25% tariffs imposed in March can be lifted by March 1 of next year. Once, China accounted for 30% of Olymel’s total pork exports; today, that figure has dropped to just 13%. The CEO of Olymel, Yanick Gervais, estimates that the tariffs will incur a loss of approximately $30 million over a year.
Future Implications
To ensure long-term stability, both Canada and Quebec must reduce their reliance on the U.S. as their primary trading partner. The China-Canada accord represents a pivotal move towards broadening export markets and creating a more balanced trade environment.
It is imperative for Canada to strengthen ties with China. As the global landscape shifts, fostering this relationship will become increasingly beneficial amid fluctuating dynamics with the United States.
