Canada and China have agreed to slash tariffs on electric vehicles and canola in a new trade deal aimed at rebuilding ties, Canadian Premier Mark Carney announced, reported Reuters.

Mr Carney said Canada will allow up to 49,000 Chinese electric vehicles at a tariff of 6.1 per cent, compared with the 100 per cent duty imposed by former prime minister Justin Trudeau in 2024. He said the pact would spur Chinese investment in Canada's auto sector and accelerate progress toward net zero.

Ontario premier Doug Ford criticised the deal, warning it would invite a flood of cheap Chinese cars without guarantees of reciprocal investment. Mr Carney countered that Canada must learn from innovative partners and strengthen supply chains to build a competitive EV sector.

The agreement also covers agriculture. China will lower tariffs on Canadian canola seed to about 15 per cent from 84 per cent by March 1, while removing penalties on canola meal, lobsters, crabs and peas. Mr Carney said the changes could unlock nearly US$3 billion in export orders for Canadian farmers and fishermen.

Both nations pledged to restart high-level economic dialogue and expand cooperation in agriculture, energy and green technology. Mr Carney said Canada will double its energy grid in 15 years and scale up LNG exports to Asia, producing 50 million tonnes annually by 2030.

He described China as a more predictable partner than the US, noting recent progress in bilateral ties. Analysts said the rapprochement could reshape the context of Sino-US rivalry, though Canada is unlikely to shift away from Washington given its deep security ties.