A
Jan 31
The Canadian Relationship with China
Jan 30
Micron Insight Series
The Canadian Relationship with China
The Chinese are Canada’s second-largest trading partner at approximately $80 billion.
We Build It Better
Series Intro
Video
Watch the opening episode of Taxing Tariffs as we connect early American tariff debates to the modern questions facing the Supreme Court, China, and U.S. manufacturers.
The Canadian Relationship with China
Welcome back to TAXING TARIFFS! In this post we’ll look at the Canadian trade relationship with China.
Over the frigid weekend of January 21st as a polar arctic blast pressed down upon the United States, the U.S. relationship with Canada went into a deep freeze. Donald Trump once again threatened tariff retaliations if Canadian Prime Minister Mike Carney’s government “ … makes a deal with China.” One hundred percent tariffs was the particular level given as a potential penalty for the unspecified relationship. While the Chinese are trying to warm up to the Canadians, the U.S. is doing its best to give them the cold shoulder.
Taking a closer look at the Canadian and Chinese relationship one sees that the Chinese are Canada’s second-largest trading partner. Some perspective here is do. Counting annual trade in both directions between two countries, China amounts to approximately $80 billion. Canada’s largest trading partner is the U.S. which accounts for about $1 trillion. Canada’s trade with the U.S. is an order of magnitude bigger in dollar value than its trade with China. Nonetheless, there is a trade deal afoot between Canada and China.
According to CBC News (a division of the Canadian Broadcasting Corporation) the Canadian government has agreed to allow 49,000 Chinese electric vehicles into the market at a tariff rate of 6.1%.
Earlier in the month of January, Prime Minister Mark Carney and his delegation met with Chinese President Xi Jinping and his delegation in the Great Hall of the People in Beijing, China. According to CBC News (a division of the Canadian Broadcasting Corporation) the Canadian government has agreed to allow 49,000 Chinese electric vehicles into the market at a tariff rate of 6.1%. That would be a reversion to the rate that was in place before the Ottawa government placed a 100% tariff on all Chinese EVs in 2024. China, in return, is expected to lower tariffs on Canadian canola to 15% by March. In addition, Beijing has promised to remove tariffs on Canadian canola meal, lobsters, crab, and peas as of March until at least the end of 2026. There was also talk of progress on issues around Canadian pork exports. A deal has been struck between China and Canada.
This deal was born on the bed of the tit for tat tariff slap match that took place a year ago. Then-prime minister Justin Trudeau placed a 100% tariff on Chinese electric vehicles starting in the summer of 2024. China responded by launching an anti-dumping investigation of their Canadian canola imports. In March of 2025, Beijing placed a 100% tariff on Canadian canola oil, canola meal, and peas. To this they added a 25% tariff on pork and various seafood products. Not to leave any canola product unaffected, in August China slapped a 76% tariff on Canadian canola seed. This is what Mark Carney inherited in March 2025.
Because of the almost lockstep move in implementing 100% tariffs by both the U.S. and Canada, there was, and is, concern over the continental agreement between Mexico, the U.S. and Canada. This agreement, which by the way, the U.S. calls USMCA (United States – Mexico -Canada Agreement) and Canada calls CUSMA (Canada – U.S. – Mexico Agreement) allows for trade with low or no tariffs between the three countries. In mid January Trump acknowledged his approval for a Canadian deal with China, even going so far as to say “If you can get a deal with China, you should do that.” However, U.S. Trade Representative Jamieson Greer had a different take on the deal. Relating to CNBC that he thought Canada would regret making such a deal, saying “I think it’s problematic for Canada.” From current events it would seem that the U.S. Trade Representative has caught the ear of the President.
According to the Trade Data Online of the Government of Canada available at the ised-isde.canada.ca website China’s total trade with Canada in 2024 was $86.8 billion in current U.S. dollars. Chinese imports to Canada exceeded Canadian exports to China by $43 billion. With all other trading partners, it had a positive trade balance of $53 billion. Also in 2024, Canadians imported $1.56 billion of Chinese motor vehicles (which includes electric motor vehicles) under NAICS code 336110 – automobile and light duty motor vehicle manufacturing. $51.6 billion of the same was imported from all other countries. 32 times more vehicles were imported to Canada from the rest of the world than from China. And yet, China is Canada’s second largest trading partner overall.
China has struck a group of tariff deals with Canada. Now Trump wants to slap tariffs on Canada for playing nice with China. Or perhaps more particularly, for allowing 49,000 relatively inexpensive Chinese electric vehicles into North America.
What do you think about the tit for tat tariff exchanges between trading partners? Is it good or bad for North America if Canada allows 49,000 Chinese EVs imports? Is it appropriate for a President to use tariffs to punish a neighbor, an ally, and trading partner for making a deal? Once you’ve sent your answers to taxingtariffs@microncorp.com we’ll see you next time on TAXING TARIFFS.
Micron We Build It Better
Part of the Taxing Tariffs series from Micron Corporation.
Taxing Tariffs: An Insight Series by Micron Corporation discusses Tariffs & Trade Policy, the History and Context of Tariffs, and a Manufacturing Perspective from and EMS company.
Deal Between the US – Taiwan and Greenland at the Forefront
Jan 22
Welcome back to “TAXING TARIFFS!” Brought to you by Micron Corporation where “We build it better.”
Of the utmost importance towards our globally shared commitment to electronics manufacturing, Taiwan and the United States came to an agreement on a $250B deal. This, in addition to a reciprocal tax that will maintain tariffs to approximately 15%, rather than 40%, or more, for now. The two nations under their democratic leaderships have come to this agreement. And that may be a very good thing. If both these nations have come to this position because of economic forces, rather than militaristic positioning, all the better.
Specific levels of tariffs are important for sure. And yet, the numbers being bandied about are more political positioning than proper assessments of the actual levels of taxes being levied. For evidence of this we need look no further than the United States International Trade Commission publication of the “Harmonized Tariff Schedule of the United States (2025) Revision 32” in December under Publication Number: 5690.
Greenland is now at the forefront. Because of it’s strategic location in the Arctic Ocean it is in the sights of the current U.S. administration. Positioned at the center of the northern geographic locations of Russia, Europe, Canada, and the U.S. state of Alaska it certainly has tremendous geopolitical value. It also has “immense” stores of so called rare earth elements. The current president has called for the acquisition of Greenland. In doing so, he has joined the ranks of President Truman and other politicians from the late 1800s (when the U.S. acquired Alaska) that have discussed such a matter. The Kingdom of Denmark has never appreciated such notions.
And, perhaps, we are all becoming patriots now; each from their own nation. Let’s add the current national targets of recent US tariff policies to our list of trade partners. These are Denmark (which owns Greenland), Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom. All of which may be facing an increase of 10% tariffs for opposition to such an acquisition. Once again, what that 10% actually represents is not yet specific, ad valorem, or even perhaps subject to de minimis rules.
At the World Economic Forum in Davos the American President not only stated his intention to acquire what he often calls “Iceland” he went so far as to suggest he might use military force. In response, small numbers of troops from other countries have been deployed to Greenland. Fifteen French mountain infantry soldiers, some number of Swedish troops, and a 13-person German Army reconnaissance team were being mobilized to show America capturing Greenland would be opposed. Small numbers of forces indeed. Yet the point was made. And by the end of the forum in Davos enough pushback had been delivered that the American president backed off. What else happened during the 72-minute presentation was either astounding, surreal, or just plain upsetting depending on your perspective. After having been emboldened by tariff “negotiation” victories, and the wresting of a dictator named Maduro from the country of Venezuela, the current president seemed emboldened enough to confront, insult, and just plain “piss off” everyone even his own administration.Back in North America there has been an “Unexpected Winner,” according to the WSJ. Mexico, which according to some economists may have had been set up for difficult economic situations because of the tariffs has actually increased its exports to the U.S. Auto-industry exports took a hit, that’s for sure, but all other exports of manufacturing goods surged 17%. That includes steel and aluminum. All that good news even with the imposition of 25% tariffs in 2025. Trade in goods (not necessarily services) between the U.S. and Mexico reached approximately 900$B in 2025. The president had taken to holding up placards listing new tariff rates for so many countries, but not for Mexico. With that positive development, Mexican companies apparently experienced a great increase in restarting manufacturing projects. Today, almost 85% of Mexico’s total exports remain tariff-free under the USMCA.
That 85% tariff-free number belies the fact that political negotiations and statements about tariffs certainly don’t tell the whole story. Remember there is a Harmonized Tariff Schedule with so many details in it that one should be wary of summing up tariffs for any one country with a single number.
Do you view Taiwan’s deal as positive? What do you think about Greenland? Should America try to wrest control of the largest island in the world? And are you happy that Mexico is exporting more? After you answer these questions at INFO@MICRONCORP.COM we’ll see you next time on TAXING TARIFFS.