In the first leader-to-leader meeting since the Meng Wanzhou crisis, Prime Minister Carney has "left the door open" to easing investment rules and lifting the 100% EV tariff imposed by the previous government.
The last time a Canadian prime minister had a meeting with Chinese President Xi Jinping was in 2017. (Ichiro Banno/Pool/Reuters - image credit)
KUALA LUMPUR — Canadian Prime Minister Mark Carney said he is hoping for a significant "reset" in Canada's fractured relationship with China when he meets President Xi Jinping this week, in what will be the most significant diplomatic engagement between the two nations in years.
The high-stakes meeting, set to occur at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, will be the first formal discussion between the leaders of both nations since diplomatic relations were plunged into a "deep freeze" in 2018.
That freeze began with the arrest of Huawei executive Meng Wanzhou in Vancouver on a U.S. extradition request, an act that was immediately followed by Beijing's retaliatory "hostage diplomacy" detention of two Canadians, Michael Kovrig and Michael Spavor, for more than 1,000 days.
A Cautious Thaw
Speaking to reporters at the conclusion of the ASEAN summit in Kuala Lumpur, Carney confirmed the meeting with Xi, framing it as the next step in a cautious but deliberate thaw.
“It's the start of a broader discussion,” Carney said, referencing his recent meeting at the UN General Assembly with Chinese Premier Li Qiang.
Carney stated the meetings cover "a broad range of issues," including "the commercial relationship, as well as the evolution of the global system... So I look forward to the meeting with the president."
A Major Policy Pivot
In a significant potential pivot from the previous Liberal government, Carney signaled that everything is on the table to repair the broken relationship.
He "didn’t rule out" easing investment restrictions placed on Chinese capital by the former government of Justin Trudeau.
Furthermore, he "left the door open" to two major concessions:
Negotiating a free trade deal with the hardline communist government something the Trudeau government failed to achieve in 2017.
Lifting tariffs on Chinese electric vehicles, including the staggering 100% tariff Canada imposed in 2024, in lockstep with the United States.
Carney's move comes as U.S. President Donald Trump is also hoping to meet with Xi, after the two superpowers announced a "framework" for a possible trade deal this week.
Rebuilding from "a Low Point"
The diplomatic reset comes after years of escalating economic pain. The last official meeting between a Canadian prime minister and Xi was in 2017. After the relationship soured over the Meng/Spavor/Kovrig crisis, it was further damaged by a tit-for-tat trade war.
Ottawa imposed a 100% tariff on Chinese EVs and a 25% levy on Chinese steel and aluminum. Beijing retaliated swiftly, imposing a crippling 75.8% duty on Canadian canola seed, a move that has inflicted significant pain on farmers in Alberta, Saskatchewan, and Manitoba.
Carney is framing his approach as one of new, pragmatic leadership, acknowledging that the relationship is starting from a low point but must be rebuilt.
“Relationships rebuild over time when they have... changed for the worse. And so we have a lot of areas on which we can build,” Carney said.
He noted that China remains Canada’s second-largest trading partner, the second-largest economy in the world, and one of the most influential nations on the world stage a reality he suggests Canada can no longer afford to ignore.