By: Abhinav Prakash, Research Analyst, GSDN

This year marks the 55th anniversary of China-Canada diplomatic ties and the 20th anniversary of the China-Canada strategic partnership. Both sides are viewing this as an opportunity to promote and improve bilateral relations. China and Canada’s past diplomatic relationship was filled with a series of cooperation, challenges and mutual skepticism. On this occasion, they agreed to resolve past frictions, and advocated for stronger business ties in areas like clean energy, technology, and trade.

In the recent past, Canada-China ties have been a source of tension for the United States. Due to the trade war, Canada is attempting to diversify its trading partnership rather than being completely dependent on US, as Trump in February 2025 imposed 25% tariffs on goods and 10% tariff on Canada’s oil and energy, which he announced would increase up to 35% in August 2025. The reason cited for the recent action is to hold Mexico, China and Canada accountable for illegal immigration, flow of fentanyl and other contraband drugs into US.

The US consistently remains the first and largest trading partner of Canada. The bilateral merchandise trade between the US and Canada significantly declined from US$ 968.4 billion in 2023 to US$ 762.1 billion in 2024. Whereas, China is the second largest trading partner of Canada with bilateral merchandise trade of US$ 119 billion and US$ 117 billion in 2023 and 2024 respectively.

As Trump aggressively remarked, “I deal with every country, indirectly or directly. One of the nastiest countries to deal with is Canada. We don’t need Canadian lumber, we don’t need their energy, we don’t need anything. We certainly don’t want their automobiles”, also referred “Prime Minister of Canada as Governor Trudeau” and made a disproportional estimate of the American trade deficit with Canada, proclaiming that “Canada was meant to be the 51st state because we subsidize Canada by US$ 200 billion a year.” These insensitive words from President Trump were totally unacceptable and against the sovereignty and integrity of Canada.

The above remarks have sparked retaliatory actions, threats and boycotts of American goods in Canada, and resulted in bitterness between the two historically friendly nations. Pew polling shows 59% of Canadians now view the U.S. as their greatest threat, up from just 20% in 2019, driven by contentious U.S. policies. Former Canadian P.M. Trudeau remarked “I suggest that not only does the Trump administration know how many critical minerals we have, but that may be even why they keep talking about absorbing us and making us the 51st state.”

The Trade war has acted as a catalyst in China and Canada relations. They already had the 2018‑2028 Memorandum of Understanding, for collaboration on emissions trading systems, carbon pricing, technology exchanges, including ministerial-level dialogues. The resumption of the Joint Economic and Trade Committee (JETC) in 2025 after Mark Carney became P.M and a meeting between the Canadian Minister of International Trade and China’s Minister of Commerce in Paris, indicates a deliberate effort to resume the dialogue and address outstanding trade issues between Canada and China.

In May 2024, the expanded Trans Mountain Pipeline (TMEP) began its commercial operations in Canada, TMEP has allowed Canada to expand its market beyond the United States, which was previously its largest customer, China has emerged as the primary buyer of Canadian crude shipped through the expanded pipeline, which will strengthen their partnership in energy sector. The China-Canada Business Council (CCBC) has initiated a Canadian Agri-Food Mission to China in November 2024, emphasising on Canada’s commitment to agri-food exports.

Cultural relations between China and Canada have served as a bridge for mutual understanding, facilitated by student exchanges, joint initiatives, and community programs. The Canada-China Scholar’s Exchange Program remains active, offering scholarships to Canadian students, faculty, and professionals for studies or research in China and to Chinese scholars for research in Canadian studies in Canada.

In June 2025, the Chinese Embassy in Canada organized a symposium on China–Canada relations, bringing together nearly 20 experts and representatives from major Canadian universities, think tanks, media outlets, and business councils deliberating cooperation across trade, agriculture, energy, climate, and people-to-people exchanges.

China-Canada cooperation and closeness is only observed in sectors like trade, energy and education and culture. This means Canada strongly aligns and has historic strategic partnership with the US. The Arctic Security issue is the bone of contention between Canada and China; The melting ice caps will present China and Russia an alternative sea route to major markets of Europe. China calls itself a “nearby Arctic state” and its 2018 Arctic Policy White Paper, describes China’s priority in “shipping, resource development, regional governance and science” and has a “Polar Silk Road Plan” in the Arctic region.

In 2020, the Canadian government blocked Shandong Gold Mining Co. Ltd. from acquiring TMAC Resources Inc., which is a Canadian gold mining company that operates in the Arctic. The decision was based on national security concerns, specifically under the Investment Canada Act, which allows the government to review foreign investments that could be detrimental to national security.

In December 2018, Canada arrested Huawei CFO Meng Wanzhou in December 2018 at the request of the US. The aftermath of the event was Chinese retaliation and detention of two Canadians, Michael Kovrig and Michael Spavor, which observers describe as “hostage diplomacy”. The Canadian federal government has banned Huawei and later ZTE from working on Canada’s fifth-generation networks over security concerns. The government also ordered the withdrawal of 5G equipment from Huawei and ZTE used in Canada.

During October 2024, Canada imposed 100% tariffs on Chinese electric vehicles and 25% on steel/aluminum. In response, China reciprocated with 100% tariffs on Canadian peas, canola, rapeseed oil, and 25% tariffs on seafood and pork. Canada’s International Trade Tribunal found evidence of domestic investigations on trade dumping that steel strapping from China may have harmed domestic industry through dumping and subsidies, with preliminary determinations expected by August 8, 2025.

The Canadian government in June 2025 has ordered Chinese surveillance camera manufacturer Hikvision (Hangzhou Hikvision Digital Technology Co), to cease operations in Canada over national security concerns. Hikvision has faced many sanctions and restrictions by the United States, over the past five years for the firm’s dealings and the use of its equipment in China’s Xinjiang region, where human rights organizations have documented abuses against the Uyghur community and other Muslim population.

Canada might appear drifting towards China in terms of trade and economic relations especially during the Trump regime, but overall, China-Canada partnership has undergone lots of turbulence in recent past years. “A full reset of Canada-China relationship isn’t feasible… government should focus on building stable, respectful diplomatic relations… to manage disagreements and mitigate any possible worsening of the relationship…” says the former Canadian diplomat & geopolitical advisor Michael Kovrig.