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By Rich Percival
Associate News Editor
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Canada has signed new economic agreements with China as Ottawa seeks to ease trade tensions with Washington.
Announced late on Monday following talks in Vancouver, the agreements deepen financial cooperation between Canada and China as Prime Minister Mark Carney prepares to head to Shenzhen for the Asia-Pacific Economic Cooperation (APEC) summit.
Canada’s Finance Minister François-Philippe Champagne and International Trade Minister Maninder Sidhu hosted He Lifeng, vice-premier of China, in Vancouver for negotiations.
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Champagne said: “As two major economies with significant commercial ties, Canada and China share an interest in maintaining an open dialogue and advancing economic cooperation.
“Our discussions in Vancouver focused on opportunities to expand two-way trade and investment and deepen financial cooperation.
“By working together where our interest aligns, we can create new opportunities for Canadian businesses and workers and build a stronger, more resilient Canadian economy.”
Both countries have also agreed to extend an existing trade deal until the end of 2028. China will continue charging lower tariffs on Canadian products, including canola meal, peas, lobster and crab.
In return, Canada will continue allowing certain Chinese steel and aluminum products into the country without additional tariffs.
The deal is designed to help Canadian farmers and seafood businesses sell more products to China while giving Canadian companies access to Chinese metals they cannot easily buy at home.
The agreement also comes as Canada seeks to diversify its trade relationships amid continuing tariff disputes with the United States.
Carney said Washington had withdrawn a proposal that would have given the United States final approval over Canadian trade agreements with other countries.
Meanwhile, President Donald Trump has said a deal with Canada is close, but significant differences remain between the neighboring countries.
Inside Canada's New Deal With China
The discussions produced three agreements covering cooperation between the countries' finance ministries, financial regulators and central banks.
The arrangements establish closer dialogue on economic policy, cooperation between financial regulators and a joint working group involving the two countries' central banks.
Both sides also welcomed progress on a bilateral currency-swap arrangement and agreed to pursue greater financial-services market access.
The meetings followed Carney's January visit to Beijing, when he and Chinese President Xi Jinping announced a renewed strategic partnership.
The agreements form part of Carney's efforts to reduce Canada's economic dependence on the United States by expanding trade with other countries.
Speaking at a press conference, asked whether the new deal could jeopardize Canada’s trading relationship with the United States, Champagne said: “I would say every G7 country has a strategic relationship with China.
“Canada is no different in the sense that if one of the pillars is to diversify our trade, I would say it’s kind of obvious you have to talk to your second largest trading partner, which happens to be the second largest economy in the world.
“So I would say it goes without saying that Canada has strategic dialogue with China. You know, we are engaging. It’s very clear what are the guard rails.”
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Philippe Rheault, director of the China Institute at the University of Alberta, who attended a reception with the Canadian finance minister and the Chinese and Canadian delegations in Vancouver, said: “My read of both ministers’ remarks is that the Canadian government is clearly signaling its plans to continue to lean in on broadened engagement with China, notwithstanding recent political developments in Washington.”
Meanwhile, the extension builds on an agreement reached during Carney's visit to Beijing in January, which helped ease a trade dispute that had hit Canadian agricultural exports.
China suspended a 100 percent tariff on Canadian canola meal in March, allowing it to enter the country duty-free. However, restrictions have not disappeared entirely: Canadian canola seed still faces a 14.9 percent tariff, while canola oil remains subject to a 100 percent duty.
The easing of restrictions has already coincided with a sharp increase in Canadian exports.
Canadian canola meal exports to China more than doubled from $104 million to $277 million, while pea exports rose from $76 million to $245 million. Lobster exports also increased by 57 percent, from $91 million to $142 million.
The wider arrangement supported industries sustaining more than 600,000 Canadian jobs.
China is already Canada's second-largest single-country merchandise trading partner, with bilateral goods trade reaching $89 billion last year.
According to the latest figures from Ottawa’s Department of Finance, Canadian exports to China totaled $25 billion last year, while imports from China reached $64 billion.
Ottawa says Canadian merchandise exports to China have risen 41 percent so far in 2026 compared with the equivalent period last year.
Carney’s administration wants to increase exports to China by another 50 percent by 2030.
What Is the Latest With the United States?
Trade negotiations with Washington and Ottawa remain ongoing but Newsweek understands both parties remain apart on a deal being reached.
A Canadian government official told Newsweek: “Progress is being made slowly, but there is still a way to go before we see any deal.”
Last week, Washington withdrew a demand that would have allowed the United States to exercise final approval over Canada's trade agreements with other countries alongside other demands for language and culture.
But tariffs on lumber, steel, aluminum and automobiles remain central sources of tension in the trading relationship.
Citing the tariffs, Canada’s Foreign Minister Anita Anand says Ottawa will seek to ease trade frictions following Republican losses in the midterm elections.
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Speaking at the Group of Seven (G7) foreign ministers meeting in Paris, France, she said: “We’re talking about just a week or so out of these elections, and Canada very much hopes that we will have progress on the trade front.
“These sectors [lumber, steel, aluminum and automobiles] are being hit very hard in Canada, with workers losing their jobs.”
She said Canada has signed more than 20 security, economic and defense agreements over the past year, making Canada the only G7 nation to have a free trade agreement with each member of the group of advanced economies.
“This is the work that we are doing to double non-U.S. trade over the next 10 years,” she said.
What About Canada's Latest US Tariff Announcement?
Canada has also announced changes to its tariffs on American goods, extending relief for some US imports while preparing to reimpose duties on products that can be manufactured domestically.
Ottawa announced on November 9 that the country's tariff relief program would be extended until June 30, 2028.
The program allows Canadian businesses to avoid certain retaliatory tariffs on American products that are difficult to source in Canada.
The exemptions will also cover additional non-steel goods used in mining, quarrying and oil and gas extraction, as well as products used by public education organizations.
However, Ottawa is withdrawing exemptions for some American goods where Canadian alternatives are available.
Certain U.S.-made trailers will lose relief from December 1, while specified aluminum wire, extrusions and paperboard products will become subject to tariffs again from February 1, 2027.
The changes are intended to protect Canadian manufacturers while limiting costs for businesses that depend on American supplies.
Canada has assessed $10 billion in tariffs on American goods between March 2025 and October 26, 2026.
Of that amount, approximately $6.30 billion had been relieved or omitted, leaving $3.7 billion in net tariff revenue.
Canadian Trade Minister Dominic LeBlanc said: “Extending these tariff relief measures gives Canadian companies the support they need today while encouraging greater use of Canadian-made goods and services.”
Contact Newsweek editors on this story: John Fitzpatrick and Emma Lee-Sang
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