Analysis of the Potential Impacts of Improved China-Canada Relations on Commodity Trade and Cross-Border Investment

Based on the latest news and market data, I will systematically analyze the potential impacts of improved China-Canada relations on commodity trade and cross-border investment.

---

Canadian Prime Minister Mark Carney paid an official visit to China from January 14 to 17, 2026. This was

, marking an important turning point in China-Canada relations after long-term tensions following the 2018 Meng Wanzhou incident [1][2]. The visit was arranged after President Xi Jinping and Prime Minister Carney met during the Asia-Pacific Economic Cooperation (APEC) Summit in October 2025, where the two sides reached important consensus on the direction for improving and developing China-Canada relations [3].

Prime Minister Carney’s delegation was large, including cabinet members responsible for foreign affairs, industry, agriculture, natural resources, and international trade, fully demonstrating Canada’s emphasis on deepening economic and trade cooperation with China [2]. Canada’s new government has proposed advancing the China-Canada strategic partnership, and promoting more outcomes in bilateral relations in a pragmatic and constructive manner [3].

---

According to the latest data,

, with Canada’s exports to China amounting to US$29.9 billion and imports from China standing at US$88.8 billion [4]. In the first 11 months of 2025, bilateral trade volume reached US$82.15 billion, showing strong trade resilience [3].

Canada’s exports to China are mainly concentrated in two categories:

:

Commodity Category	Estimated Export Share	Strategic Importance
Crude Oil	35%	Highest
Canola and Related Products	15%	High
Potash	12%	High
Natural Gas	8%	Medium-High
Lumber	5%	Medium
Seafood	3%	Medium

Notably,

, with crude oil shipments to China reaching 207,000 barrels per day in 2025, exceeding the 173,000 barrels per day shipped to the United States [4].

Currently, China-Canada trade faces multiple tariff barriers, which have a significant impact on bilateral trade:

• China imposes a 100% tariff on Canadian canola
  : Previously, China was the second-largest export destination for Canadian canola and its products, with trade volume reaching US$4.9 billion in 2024, but the tariff measures have severely impacted bilateral agricultural trade [5][4]
• Canada imposes a 100% tariff on Chinese electric vehicles and a 25% tariff on steel and aluminum products
  : These retaliatory measures implemented in 2024 have exacerbated trade frictions [4]
• Canadian agricultural products such as canola and seafood have been affected by China’s retaliatory tariffs

Analysts believe that China and Canada may promote

[4]. China has clearly linked canola tariffs to electric vehicle tariffs, and the two sides are expected to find a balance in negotiations.

• Alberta, Canada, is rich in heavy oil resources, ranking fourth globally in production, which is suitable for use in southern Chinese refineries
• With Venezuela’s production capacity constrained, Canadian oil exports to China not only meet market demand but also increase Canada’s export revenues
• The energy sector has become a new highlight of bilateral economic and trade cooperation [3]

• Canada is the world’s largest potash producer and exporter, while China is the world’s largest potash consumer
• Currently, there is zero tariff on potash trade, providing great cooperation potential
• China has strong demand for potash, and cooperation between the two countries in the potash sector can provide important support for agricultural development

• Canadian canola is of high quality and is an important raw material for China’s feed and edible oil industries
• If the tariff issue is resolved, bilateral agricultural trade is expected to rebound significantly

---

Canadian Prime Minister Mark Carney announced a major economic strategic goal in 2025:

, in order to reduce dependence on a single market [4][6]. This strategic goal provides a policy foundation for China-Canada investment cooperation.

Canada’s public opinion environment is also changing. According to an Ipsos poll,

, a figure much lower in 2020 [6]. This shift in public opinion reflects Canada’s strategic need for diversified trade partners.

Canada has the most stable and easily exploitable reserves of

among developed countries, which are core raw materials for modern batteries and new energy industries [7].

• The two sides may explore a
  joint venture model
  , rather than complete sales or unconditional exploitation
• The focus is on establishing a guaranteed partnership to ensure long-term and stable resource access
• Regions such as Ontario estimate that strategic mineral projects related to the battery supply chain are expected to attract
  tens of billions of Canadian dollars in investment
  over the next decade [7]

Investment Field	Potential	Risk	Cooperation Feasibility
Potash/Mineral Development	High	Medium	High
Energy (LNG/Pipelines)	High	Medium	High
Agriculture (Canola Processing)	Medium	Low	High
Technology/Finance	Medium	High	Medium
Infrastructure	Low	Low	Medium

Improved China-Canada relations may bring the following policy benefits for investment:

1. Investment Review Likely to Be Relaxed
   : Previously, the Canadian government rejected Chinese enterprises’ mining acquisition transactions on national security grounds [8]. After the improvement of relations, such reviews may be more objective and rational
2. Expanded Cooperation Areas
   : Expanding from traditional energy and minerals to agricultural technology, green technology, digital economy, and other fields
3. Broader Financing Channels
   : Strengthened cooperation between Chinese and Canadian financial institutions to provide more convenient financing services for cross-border investment
4. Optimized Business Environment
   : The two sides may sign more investment protection agreements to reduce investment risks

---

The United States is Canada’s most important ally and neighbor, but the uncertainty of US policies in recent years has put pressure on Canada:

• The United States imposed tariffs on Canadian steel and aluminum products, impacting Canada’s exports
• The United States is promoting a containment strategy against China in the Indo-Pacific region, requiring Canada to “pick a side” in trade and diplomacy
• The policies of the Trump administration are unpredictable, and Canada needs to reduce its dependence on the United States to safeguard its own interests [4]

Canada hopes to uphold multilateralism and free trade, opposing unilateralism, which is an important background for promoting this visit to China [4].

Analysts point out that there has been a significant change in the Canadian public’s worldview:

, while positive views of China are higher than those of the United States [4]. This shift provides a public opinion foundation for Canada to enhance cooperation with China.

As a medium-power country highly dependent on foreign trade, Canada must seek more trade partners to enhance economic resilience. The Carney government is committed to re-examining Canada’s international strategy, particularly its layout in the Asian market.

---

Although the prospect of improved China-Canada relations is promising, there are still the following risk factors:

1. Political Trust Not Fully Restored
   : The shadow of the Meng Wanzhou incident still affects the perception of China among Canadian politicians and the public [4]
2. Long-Standing Political Differences
   : Canada has repeatedly criticized China on issues such as Xinjiang, Tibet, and Hong Kong, while China has accused Canada of interfering in its internal affairs [4]
3. Domestic Political Resistance
   : Ontario Premier Doug Ford has called for maintaining high tariffs on Chinese electric vehicles [6]
4. Constraints from US Factors
   : Canada cannot separate itself from the United States in terms of security and may face pressure from the United States
5. Complexity of Tariff Issues
   : Involving multiple sectors such as electric vehicles, steel, and aluminum, a comprehensive resolution in the short term is difficult

---

The improvement of China-Canada relations will have

on commodity trade and cross-border investment:

• Commodity Trade
  : Sectors such as canola, potash, and energy are expected to benefit first, and tariff issues may be gradually alleviated
• Cross-Border Investment
  : The space for investment cooperation in strategic minerals, energy development, and agricultural processing will expand
• Cooperation Models
  : Joint ventures may be more widely adopted to balance the interests and policy concerns of both sides

For investors focusing on China-Canada economic and trade cooperation, the following areas deserve key attention:

1. Potash and Agriculture Sector
   : Zero tariff on China-Canada potash trade, with huge potential for agricultural cooperation
2. Energy Sector
   : Canadian crude oil exports to China have exceeded those to the United States, marking a new stage of energy cooperation
3. New Energy Strategic Minerals
   : Cooperation opportunities in the processing and trade of strategic minerals such as nickel, lithium, and cobalt
4. Agricultural Technology
   : Investment opportunities in the processing of agricultural products such as canola

In the long run, the improvement of China-Canada relations is in the fundamental interests of both sides:

• China needs a stable supply of energy and resources
• Canada needs diversified export markets and investment sources
• The two countries are highly complementary in resource endowments and economic structures

With the in-depth advancement of Prime Minister Carney’s visit, China-Canada economic and trade cooperation is expected to enter

, bringing new growth drivers to the economies of both countries, while also making positive contributions to the stability of global supply chains and the maintenance of multilateral trade order.

---

[1] Guancha.cn - Canadian Prime Minister Mark Carney Arrives in Beijing to Begin His First Official Visit to China Since Taking Office (https://www.guancha.cn/internation/2026_01_14_803829.shtml)

[2] CCTV News Client - Canadian Prime Minister Mark Carney Arrives in Beijing (https://www.guancha.cn/internation/2026_01_14_803829.shtml)

[3] Embassy of the People’s Republic of China in Canada - Ambassador Wang Di Publishes Ambassador’s Essay in ‘People’s Daily’ (https://ca.china-embassy.gov.cn/xw/202601/t20260115_11812903.htm)

[4] BBC Chinese - Canadian Prime Minister Visits China for the First Time in 8 Years: Why Carney’s China Trip Focuses on Economy and Trade? (https://www.bbc.com/zhongwen/articles/clyw3dyv18do/simp)

[5] China Oil and Fat Network - Looking Forward to Improved China-Canada Trade Relations, Canadian Canola Responds Positively (https://www.oilcn.com/article/2026/01/01_96992.html)

[6] United Daily News - Reducing Dependence on the US: Canadian Prime Minister Visits China on January 13 to Reconstruct Economic and Trade, Diplomatic Relations (https://udn.com/news/story/7333/9259485)

[7] Wenxuecity - Canada Signs a Shocking Trade Agreement with China, Washington Panics (https://www.wenxuecity.com/myblog/72696/202601/10211.html)

[8] King & Wood Mallesons - Reefs Under the Gold Rush: Core Legal Risks and Response Strategies for Chinese Enterprises’ Overseas Gold Mine Investments (https://www.kwm.com/cn/zh/insights/latest-thinking/reefs-under-the-gold-rush-core-legal-risks-and-response-strategies-for-chinese-enterprises-overseas-gold-mine-investments.html)