Following a summit in Gyeongju with President Xi Jinping, Prime Minister Mark Carney has signaled a strategic shift toward cooperation with China. This move involves allowing limited Chinese-made electric vehicles into Canada to secure critical supply chains.
The Gyeongju Summit and the reversal of 2024's 100% EV tariffs
The diplomatic landscape shifted significantly following the October 31, 2025 , summit between Prime Minister Mark Carney and President Xi Jinping in Gyeongju, China. As the report indicates, this meeting laid the groundwork for enhanced cooperation in solar, wind, and battery technologies. this move comes after Canada's controversial 2024 decision to impose 100% tariffs on Chinese electric vehicles, a policy largely driven by pressure from the United States.
While the initial decision to allow Chinese EVs appeared to be a tactical move to ease Chinese tariffs on Canadian canola, the scope of the agreement has since expanded into a fundamental realignment of energy policy . By allowing a limited number of Chinese-made electric vehicles into the domestic market, the Carney administration is attempting to pivot from protectionism toward a long-term strategic partnership.
Leveraging China's 75% dominance in electric vehicle batteries
Canada is positioning itself to tap into China's massive manufacturing scale to accelerate its own low-carbon transition. According to the report, China currently controls 80% of solar panel production, 60% of wind turbine manufacturing, and 75% of the electric vehicle and battery market. This dominance makes China an unavoidable partner for any nation seeking rapid decarbonization.
Bijan Ahmadi, the COO of the Canada China Business Council, noted that China's technological agility and manufacturing capacity could provide a significant boost to Canada's clean energy ambitions. This is particularly relevant given the projected growth in Chinese exports, which are expected to rise from 28,000 units in 2019 to 316,000 by June 2026.
Mélanie Joly’s Beijing negotiations and the critical mineral play
To solidify these ties,Mélanie Joly recently visited Beijing to engage with five different Chinese electric vehicle manufacturers. These discussions focused on negotiating joint ventures and information-sharing arrangements that could optimize Canada's clean energy supply chains. This strategy aims to reverse the historical trend of Western automakers merely absorbing technology, instead positioning Canada to learn from China's expertise in energy storage and electrification.
While the tech-sharing aspect is vital, the long-term value for Canada may lie in its natural resources. Moe Kabbara , CEO of the Canadian Transition Accelerator, suggests that while China may currently rely on Canada's oil and gas, the real strategic advantage is Canada's reserves of copper, cobalt, and chromium. these critical minerals are essential for domestic manufacturing and could help Canada build a more resilient green economy.
The tension between the BC coast pipeline and U.S. trade pressure
The Carney administration is pursuing a dual-track energy policy that attempts to satisfy both the green transition and the traditional fossil fuel sector. This includes the proposal of a new pipeline to the British Columbia coast, a move designed to appease domestic oil and gas interests while simultaneously pursuing clean tech with China.. Moe Kabbara praised Canada's decision to diverge from the U.S. stance, noting that China's market dominance makes it impossible for North America to ignore in the long run.
However, several critical questions remain unanswered by the current diplomatic push. It is unclear how the United States will respond to Canada's divergence from the American stance on Chinese EV tariffs. Furthermore, the report does not specify how Canada will manage the potential security risks associated with increased information-sharing with Chinese manufacturers. Finally, the extent to which these joint ventures will actually benefit domestic Canadian auto workers remains unverified.
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