Canada has taken an unprecedented step in diversifying their energy export markets through a new trade deal with China. This is part of a larger effort by the nation to begin minimizing its economic reliance on the United States. It signals a fundamental shift in global trade dynamics. The Canadian Prime Minister Mark Carney made a visit to China for the first time in nearly a decade last week. During his visit with President Xi Jinping and other Chinese government officials, a new strategic partnership was outlined. According to a press release by the Prime Minister of Canada , this partnership is centered around collaboration in “energy, clean technology, and climate change.” Shortly after this meeting, the Government of Canada published the details of this new partnership, which most notably highlighted its plan to increase exports to China by 50% by 2030. This new trade deal with China by the Canadian government marks a monumental shift in global trade dynamics. Experts believe this trade deal is in response to increasingly hostile relations with the U.S. Government under the Trump Administration, which imposed a number of significant tariffs against them in 2025. Some of these included a 50% tariff on copper imports, a 25% tariff on steel and aluminum imports, and a 10% tariff on energy imports like oil. 95% of the Canadian Government’s energy exports, like oil, went to the United States in 2024, highlighting a heavy economic reliance. The Office of the United States Trade Representative states that Canada has “consistently been one of the top two trading partners for the United States.” However, with Canada’s new plan to ramp up exports to China by 2030, this dynamic between the two neighboring countries is shifting. Canada’s energy exports to Asia through the Trans Mountain Expansion pipeline Despite the current tension between the Canadian and U.S. governments, Canada began laying down the framework to diversify their energy exports long before President Trump took office for his second term. The completion of the Trans Mountain Expansion Project (TMX) in the summer of 2024 was the first step in opening Canadian oil markets to prominent Asian countries like China. This project was announced in 2013, began construction in 2019, and has since allowed Canada newfound access to Asian and Pacific oil markets. Canada’s oil reserves were initially landlocked in the middle of the country, making it largely difficult to trade with any other nation than the neighboring United States. However, with the completion of the TMX pipeline, oil can now be moved from the middle of Alberta into the Pacific Ocean through British Columbia. This creates a new trade dynamic that allows the country to reduce economic reliance on the U.S., and that has already started to take shape in a significant way. Seatrade Maritime News reports that Chinese imports of U.S. crude oil fell by over 60% in 2025 while Canadian oil imports increased by over 300%, highlighting the significance of the TMX pipeline. Canada’s new trade deal with China The Government of Canada has announced additional trade agreements with the Chinese Government that go beyond the export of oil and form the foundation of a new strategic trade alliance between the two nations. Electric vehicle exports from China to Canada will now meet a quota of 49,000 cars per year in 2026, with plans to expand this effort in the years that follow. Additionally, the Chinese government plans to lower tariffs on Canadian canola seeds from 84% to 15%, with tariffs on Canadian lobsters, peas, and crabs expected to be lowered as well. Canada is also opening up their markets to Chinese steel and aluminum products, creating an additional area aimed at decreasing U.S. economic reliance. This new trade alliance is an evolution of Canadian foreign policy, where it appears they have put their concerns over China’s human rights record behind them to boost economic strength. It also signals that Canada is serious about reducing their economic reliance on the United States amid ongoing tensions with the Trump Administration. Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.
