China willing to fortify economic relations with Canada amid Trump’s trade chaos

China has revealed its openness to deepen economic ties with Canada as Ottawa faced growing trade uncertainty with the United States. The Chinese embassy in Ottawa said it hopes Canada will create a positive atmosphere for discussions regarding the negotiation of a China-Canada Free Trade Agreement.

China-Canada economic woes began in 2019 after China imposed restrictions on key Canadian exports, including canola seed. China’s ban was considered a retaliation for Canada’s arrest of Huawei executive Meng Wanzhou. Although the restrictions led to billions in lost sales, the economic impact is overshadowed by the threat of 25% tariffs on all Canadian goods promised by Donald Trump.

Beijing seeks to bolster trade relations with Canada

Beijing says it’s willing to deepen economic ties with Canada as Trump brings trade chaos, per the Globe and Mail.

— unusual_whales (@unusual_whales) January 28, 2025

China’s embassy in Ottawa told The Globe that Beijing was open to talks on bolstering trade ties. The embassy said it’s willing to create a good environment for reviving Canada-China trade agreement negotiations in light of the U.S. trade threats.

“China is willing to work with Canada to create a good environment for economic and trade co-operation based on correct understanding, mutual respect, seeking common ground while reserving differences, and mutual benefit.”

~ China’s embassy in Ottawa.

Ambassador Wang Di from the embassy emphasized that fostering trade ties aligned with the interest of both nations. The embassy also highlighted China’s commitment to trade liberalization, regional cooperation, and economic integration within the Asia-Pacific.

Carlo Dade, director of trade and trade infrastructure at the Canada West Foundation, revealed during his recent visit to Beijing that Chinese officials were open to trade discussions. He noted that officials from both China’s foreign affairs and commerce ministries did not dismiss his proposal that China should take the lead in demonstrating its commitment to better trade relations with Canada.

Trump imposes tariffs on Canada and China

Trump’s proposed tariffs included a 10% to 20% universal tariff on all imports, a 60% tariff on all imports from China, higher tariffs on EVs from China or across the board, and 25% tariffs on Canada and Mexico.

In November last year, Trump threatened to impose a 25% tariff on all imports from Canada on his first day as President of the U.S. but did not follow through with the threat. The President also ordered a study into alleged unfair trade practices by April 1 but confirmed that he’s considering levying tariffs as soon as February 1.

White House Press Secretary Karoline Leavitt said that Trump’s “February 1 date for Canada and Mexico still holds.” Leavitt was asked whether Canada “met the bar” to address Trump’s concerns and avoid tariffs, and she replied that she wouldn’t be advocating for foreign nations on what they should or shouldn’t do to get away from the tariffs. The White House Press Secretary added that she talked with the President directly and confirmed that February 1 was still on the books.

The Tax Foundation estimated that the 25% tariffs on Canada and 10% tariffs on China, proposed to go into effect on February 1, would shrink economic output by 0.4% and increase taxes by $1.2 trillion between 2025 and 2034 on a conventional basis. The firm also revealed that academic and governmental studies found that the Trump-Biden tariffs had raised prices and reduced output and employment, which negatively impacted the U.S. economy.

The Canadian Chamber of Commerce argued that a tariff war could wreak havoc on the Canadian economy and cost millions of jobs. The firm revealed that a 25% tariff could cost the average Canadian household $1,900 annually and would shrink Canada’s gross domestic product (GDP) by 2.6%.

Prime Minister Justin Trudeau has said the federal government will step in to support Canadians should the tariffs move ahead. Trudeau acknowledged that a trade war would negatively impact Canadian consumers.

NDP Leader Jagmeet Singh was asked on Tuesday whether he would keep the Liberals in power to support a bailout package but said he had not had any talks with the government on the matter. 

The Canadian government rolled out an $82 billion emergency response package during the COVID-19 pandemic to help Canadians and businesses. The package included $55 billion to help businesses through tax deferrals and wage subsidies and $27 billion in direct support. 

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