The Blubber

China Signals Willingness to Strengthen Economic Ties with Canada Amid U.S. Trade Tensions

China has expressed openness to deepening economic relations with Canada as Ottawa faces growing trade uncertainty with the United States.

The People’s Republic of China remains Canada’s second-largest trading partner, following the United States, and nearly launched trade talks with Ottawa in 2017.

China’s Trade Offer Amid U.S. Tariff Threats

In 2019, China imposed restrictions on key Canadian exports, including canola seed, in what was widely seen as retaliation for Canada’s arrest of Huawei executive Meng Wanzhou. While these restrictions led to billions in lost sales, the economic impact pales in comparison to the threat of 25% tariffs on all Canadian goods promised by U.S. President-elect Donald Trump. In 2023 alone, Canada exported over $592 billion in goods to the U.S.

China’s embassy in Ottawa recently told The Globe and Mail that Beijing is open to discussions on strengthening trade ties. When asked about the possibility of reviving Canada-China trade agreement negotiations in light of U.S. trade threats, the embassy responded:

“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.”

The embassy, led by Ambassador Wang Di, emphasized that fostering trade relations aligns with the fundamental interests of both nations. It also reiterated China’s commitment to trade liberalization, regional co-operation, and economic integration within the Asia-Pacific.

China Expects Canada to Take the Initiative

While expressing interest in stronger trade ties, the Chinese embassy indicated that Ottawa must lay the groundwork for any future negotiations:

“Regarding the negotiation of a China-Canada Free Trade Agreement, we hope Canada will create a positive atmosphere for discussions.”

Carlo Dade, director of trade and trade infrastructure at the Canada West Foundation, noted that Chinese officials seemed open to trade talks during his recent visit to Beijing. Officials from both China’s foreign affairs and commerce ministries did not dismiss his suggestions that China should take the lead in demonstrating its commitment to better trade relations with Canada, particularly in light of U.S. threats.

Lingering Tensions from the 2019 Diplomatic Crisis

Canada-China relations reached a low point in 2019 after the arrest of Meng Wanzhou in December 2018 at the request of the United States. Beijing responded by jailing two Canadians and imposing bans on Canadian soybeans, canola, and pork—which were gradually lifted but not before causing billions in losses for Canadian producers.

In July 2023, Foreign Affairs Minister Mélanie Joly traveled to China in an effort to restore diplomatic channels between the two nations.