Carney Heads to Beijing to Strengthen Trade Beyond the US

Canadian Prime Minister Mark Carney will travel to China next week for a meeting with President Xi Jinping, as Canada seeks to diversify its trade and reduce reliance on the United States. This will be the first visit by a Canadian prime minister to China in over eight years. Xi extended the invitation to Carney during their meeting on the sidelines of the Asia-Pacific summit last October. 

The move to engage with China comes as Carney seeks to double Canadian exports outside the United States over the next decade. This comes amid the USMCA review, with more than 75% of Canadian exports currently headed to the United States. “We are forging new global partnerships to shift our economy from reliance on a single trading partner to one that is more resilient and better equipped to handle global shocks,” Carney said in a statement.

Carney is scheduled to be in China from Jan. 13 to 17 and will also attend the World Economic Forum in Davos, Switzerland, from Jan. 19 to 21.

China is Canada’s second-largest trading partner. Canada-China relations cooled in late 2018 after Canadian authorities arrested a top Huawei executive under an extradition agreement with the United States, prompting China to detain two Canadian citizens. Relations were further strained in 2024 when Canada imposed a 100% tariff on Chinese electric vehicles, batteries, and other goods, a move coordinated with the United States. In response, Chinese tariffs on Canadian canola, seafood, and pork significantly increased. China has offered to lift some of these import taxes if Canada removes its EV tariffs.

Mexico Pushes Back on Asian Imports

Last month, Mexico approved a major overhaul of the Law of General Import and Export Taxes (LIGIE), effective January, to strengthen domestic industry, correct trade imbalances, and reduce reliance on foreign goods. Ratified by both chambers of Congress, the reform updates 1,463 tariff lines across 17 strategic sectors, covering products from China, South Korea, India, Vietnam, Thailand, Brazil, Indonesia, Taiwan, Nicaragua, the UAE, and South Africa.

While Mexico frames the tariffs as a tool to boost domestic competitiveness, the decision is also influenced by political pressure from the United States. The Trump administration has repeatedly urged Mexico to impose duties on Chinese imports to avoid US tariffs on Mexican exports and raised concerns over China’s growing presence and alleged transshipment practices.

Guillermo Barba, Chief Economist, Top Money Report, noted that Mexico has limited room to resist US demands, especially as trade tensions rise and sectors such as steel push for stronger protections against Asian producers. The asymmetrical trade relationship with China, where Mexico imports far more than it exports, has intensified calls to shield local industries, making the new tariffs both an economic strategy and a political response to US pressure and broader geopolitical dynamics.