Canada still sends 96% of its oil exports to the US while Chinese tariffs helped drive a drop in Canadian goods shipments in 2025
Canada is testing whether closer ties with China can offset US risk – and the first move is an energy deal that could shift the country’s export and investment map.
Canada bets on China to diversify beyond US
Prime Minister Mark Carney is in Beijing on the first visit by a Canadian leader in nearly a decade, with a plan to double non‑US exports over the next 10 years, according to AP News.
He is doing it as US President Donald Trump ramps up tariffs on Canadian goods and has publicly mused that Canada could become “the 51st state.”
Canada still sends roughly three‑quarters of its exports to the US, while China is its second‑largest trading partner.
Carney has framed this trip as part of a broader push to build “a more competitive, sustainable and independent economy” and reduce reliance on a single market.
Energy MOU: clearer path for Canadian oil and LNG
The core deliverable so far is a renewed memorandum of understanding on energy, signed in Beijing’s Great Hall by Energy and Natural Resources Minister Tim Hodgson and his Chinese counterpart, as reported by BNN Bloomberg.
The MOU explicitly identifies Canada as an “important potential partner in responsibly produced and reliable global oil, LNG and LPG supply” and commits both sides to “explore opportunities for mutually beneficial cooperation.”
It also recognises “conventional energy” as playing an “important” role in the short‑term energy transition.
Crucially for investors, the deal sets up a ministerial‑level energy dialogue that will meet every 12–18 months for five years, after nearly a decade without this kind of structured engagement.
The document also recognises the potential for renewable energy co‑operation in offshore wind and solar, and opens the door for more Chinese clean‑tech flowing into Canada.
Hodgson said Beijing’s demand signal was unambiguous.
“What we heard loud and clear is that China is looking for reliable trading partners, trading partners that don’t use energy for cohesion,” he told reporters. “China is already a major consumer of Canadian energy.”
BNN Bloomberg reported that he pointed to LNG as a central opportunity, saying Canada produces “the lowest carbon‑intensity LNG in the world.” He added that they invested in the first LNG project, will invest in the second, and are a major user of Canada’s conventional oil and gas.
96 percent of Canadian oil exports in 2024 still went to the US, while just 2 percent went to China, worth $2,448.47m.
New LNG capacity and the start‑up of LNG Canada are expected to make it easier to ship gas to Asian markets, including China.
Trade “road map” and capital flows
Beyond energy, Canada and China signed an economic and trade co‑operation “road map” that aims to rebuild trade after years of diplomatic friction, CBC News reported.
Reuters said the roadmap commits both sides to maintain “open channels of communication” on trade issues, particularly in agriculture.
Ottawa welcomes Chinese investment in energy, agriculture and consumer products, while Beijing says it looks forward to Canadian capital in services, new materials, aerospace and advanced manufacturing.
Carney has been pitching Canada directly to Chinese corporates, meeting leaders from Primavera Capital Group, EV battery giant Contemporary Amperex Technology (CATL), China National Petroleum, Alibaba and wind‑technology firm Envision, according to BNN Bloomberg.
CBC News reported that the two governments also agreed to increase Canadian pet food exports to China, improve tourism links and renew co‑operation agreements including on crime.
Tariff overhang: EVs and agriculture still at risk
Canada followed the US in 2024 by imposing a 100 percent tariff on Chinese electric vehicles and a 25 percent tariff on Chinese steel and aluminium, AP News reports.
Reuters said Justin Trudeau justified the EV tariffs by arguing that Chinese state subsidies gave manufacturers in China an unfair advantage and threatened Canada’s auto sector.
China hit back in 2025 with tariffs on more than $2.6bn of Canadian farm and food products such as canola oil and meal, then extended them to canola seed, contributing to a 10.4 percent drop in Chinese imports of Canadian goods that year.
AP News reported that China also targeted canola, seafood and pork, and has signalled it could remove some tariffs if Canada dropped the 100 percent EV tariff.
Saskatchewan Premier Scott Moe joined Carney in Beijing and attended meetings at the Great Hall, BNN Bloomberg reported.
Moe has repeatedly pressed Ottawa to negotiate an end to Chinese tariffs on Canadian canola, which he says are wreaking havoc on the industry.
Industry Minister Mélanie Joly said negotiations on auto tariffs are still “ongoing” and will continue, Reuters reported.
CBC News said Foreign Affairs Minister Anita Anand described talks to persuade China to lower agricultural tariffs as “productive,” but Canadian officials have also cautioned they do not expect a “definitive elimination” of what they call “unfair” tariffs in the short term.
“New era” rhetoric, but hard details to follow
Carney has called this a “new era of partnership with China.”
He told Chinese leaders he was “heartened” by President Xi Jinping’s leadership and by how quickly the relationship has progressed, BNN Bloomberg reported.
In meetings with senior Chinese officials, he said teams in both countries had worked “to address some specific issues that have built up over time” and to “put in place the foundation for the new strategic partnership between” Canada and China, CBC News reported.
According to BNN Bloomberg, Carney also said “the progress we have made in this partnership sets up well for the new world order” and described it as “a partnership with new focus, greater depth and a sense of purpose.”
Foreign Ministry spokesperson Mao Ning said Beijing sees the visit as a chance to “consolidate the momentum of improvement in China‑Canada relations,” AP News reported.
CBC News said Premier Li Qiang and top legislator Zhao Leji both framed the trip as a turning point and signalled that China is ready to move ahead with the strategic partnership.
