What’s at stake for Friday’s meeting between Carney and China’s Xi?

Prime Minister Mark Carney responds to questions about Canada’s trade and diplomatic relationship with China.

In what will be a high stakes meeting on Friday, Prime Minister Mark Carney and Chinese President Xi Jinping will sit down across from each other to recalibrate a relationship between their countries at a time when the United States has pushed Canada to the sidelines in trade negotiations.

The meeting will take place on the margins of the summit of the Asia Pacific Economic Cooperation in Gyeongju, South Korea. According to a senior government official, it will be the first time Canada and China have had substantive discussions between their top leaders in seven years.

“We will explore what we can build on,” Carney said earlier this week to reporters traveling with him to Asia. “This is our second largest trading partner. This is the second largest economy in the world.”

Carney tamped down expectations that there would be some type of agreement signed between the two countries. When it comes to lifting Canadian tariffs on Chinese electric vehicles (EVs), Carney said the relationship needs to “deepen” first.

“There’s no preset offer issue…This is the difference between relationship and transaction,” he said on Monday.

China’s canola offer

Canada is currently undergoing a review of its decision to levy 100 per cent tariffs on Chinese-made EVs under previous prime minister Justin Trudeau. The policy, which was made in concert with the U.S., angered Beijing, which retaliated with a 100 per cent tariff on Canadian canola oil and meal and a 75.8 per cent tariff on canola seed. China has also imposed a 25 per cent levy on some seafood products.

In an exclusive interview with CTV’s Question Period, China’s ambassador to Canada Wang Di has said China will lift canola tariffs if Canada drops its EV tariffs.

Last year, the canola industry generated more than $43 billion dollars in economic activity and employed more than 200,000 people, according to the Canola Council of Canada.

While Trump’s tariffs are putting the squeeze on manufacturing jobs primarily in Ontario and Quebec, Xi’s retaliatory duties are punishing farmers in the West - with Saskatchewan Premier Scott Moe and Manitoba Premier Wab Kinew calling for the federal government to drop its levies.

Conservative Leader Pierre Poilievre has said he opposes lifting the tariffs on Chinese EVs, though he is calling for Carney to do more to support farmers and get China to drop its levies on canola.

“Mark Carney is going to meet President Xi. He needs to come home with tariffs off our farmers and fish harvesters. It’s time for him to keep his promises,” Poilievre said while speaking to reporters on Tuesday.

Pitting auto workers against farmers

But some analysts worry that Canada could fall into a “trap” that pits farmers against auto workers.

”It has to be a strategic decision that takes into account our long-term ambitions in terms of our economy and our industrial strategy,” said Vina Nadjibulla, vice-president of the Asia Pacific Foundation.

Nadjibulla says U.S. negotiations on auto need to take precedent.

“The future of our auto sector has to be decided here in Canada and in conversations with the U.S. And then after that, we have to see what we can do with China on EVs,” Nadjibulla said.

“It shouldn’t just be a decision that we make because we’re under pressure from China.”

According to Statistics Canada, total trade between the two countries in 2024 was $118.7 billion. And of that number, roughly $30 billion were Canadian exports.

Engaging Xi as Trump pulls away

Carney’s meeting with Xi is happening one day after the Chinese leader sat down with U.S. President Donald Trump on the margins of APEC.

Trump said that China had agreed to postpone its strict control on supplying rare earth minerals, while the U.S. would reduce tariffs on Chinese goods by about 10 per cent. But Beijing did not confirm the developments.

Former Canadian Ambassador to China, Guy Saint-Jacques, says the Prime Minister faces an “urgency” to reset the relationship with China because “(Canada) is far from reaching an agreement with the United States. In fact, the situation has become more complicated.”

Last Thursday, Trump abruptly ended trade negotiations with Canada over an anti-tariff ad commissioned by the Ontario government that used the voice of former Republican President Ronald Reagan.

Trump further threatened to impose an additional 10 per cent tariff above existing duties as punishment for Ontario Premier Doug Ford’s decision to run the ads during the first two games of the World Series before pulling them.

A hostile history

While the U.S. has become an unreliable ally, Saint-Jacques says Carney must be clear-eyed on China’s past record of hostilities.

“We are dealing with a country that has a very clear plan to dominate the world with its products. It will not hesitate to spy on you, to steal your technology, … and until recently was very active in terms of interfering in Canada.”

Saint-Jacques says Carney needs to be specific with Xi and tell him what won’t be tolerated: “That in good faith - we expect the Chinese to also play their part and act in a proper way.”

The relationship between Canada and China soured significantly in 2018 after Canada arrested Huawei executive Meng Wanzhou on behalf of the United States over bank fraud charges.

Days later, China separately detained Canadians Michael Kovrig and Michael Spavor over allegations of espionage — accusations they denied. Both men were eventually released after spending more than 1,000 days in a Chinese prison, not long after Meng herself was released from house arrest.

Since becoming prime minister, Carney has signaled attempts to deepen the relationship with China in some sectors. Last month, he met Chinese Premier Li Qiang, China’s second-highest ranking official, on the sidelines of the United Nations General Assembly, while Foreign Affairs Minister Anita Anand met with officials in China earlier this month.

With files from CTV News’ Spencer Van Dyk