Canadian Prime Minister Carney arrived in China for a visit, which comes at a critical moment for relations between the two countries.

Carney is the first Canadian leader to visit China since 2017 and will meet with Chinese President Xi Jinping and Chinese Premier Li Qiang.

Relations between Canada and China plunge into deep freeze after Canadian authorities arrested a key official at a Chinese telecom company Huawei In December 2018, she was in transit at Vancouver International Airport.

China retaliated by arresting Meng Wanzhou at the request of U.S. authorities, detaining two Canadians.

Sino-US relations continue to face challenges.

In 2024, Ottawa will follow the course set by Washington. Imposing 100% tariff on Chinese electric vehicles prompting Beijing to impose tariffs on certain Canadian agricultural products, including Rapeseed.

Ottawa also accuses China of political interference.

Against this backdrop, Carney’s visit “marks a realignment and a change of tone in Canada and demonstrates Canada’s desire to improve relations,” said Vina Nadjibulla, vice-president of research and strategy at the Asia Pacific Foundation of Canada.

“This is probably Prime Minister Carney’s second most challenging trip after his first visit to the White House,” Najibullah told Al Jazeera.

Carney is passionate about Diversify Canada’s economy and reduce dependence on the United States, which is the destination for nearly 80% of Canada’s exports.

Although Canada has historically been one of the United States’ closest allies, relations have soured since Donald Trump returned to the White House.

Trump has Imposing 35% across-the-board tariffs on Canada It imposed separate tariffs on steel, aluminum and lumber while repeatedly threatening to turn the country into the 51st state.

Carney has traveled extensively, including to the European Union and the Gulf (he followed Beijing to Qatar), seeking new markets and investors for the economy. The Canadian leader said he wants to double Canada’s non-U.S. trade over the next decade.

As a first step towards thawing with China, Carney met In October, Xi Jinping attended the Asia-Pacific Economic Cooperation Summit in South Korea.

“The prime minister is pragmatic and his trip will focus on concrete economic transactions – sales of Canadian energy and agricultural products,” Najibullah said, adding that she did not expect to see a blanket lifting of tariffs on both sides.

The trip is underway to review the trade agreement between the United States, Mexico and Canada. USMCA allows Canadian and Mexican goods covered by the agreement to enter the United States duty-free.

Tony Stillo, director of Canadian economics at Oxford Economics, said in a report on Wednesday that in Canada’s case, this means that about 86% of U.S. imports from Canada and Mexico are compliant, which makes the effective tariff rate on Canadian goods about 6%.

While Canada will clearly benefit from continued implementation of the USMCA, Trump said on Tuesday that the trade deal “irrelevant“To the United States.

But Stilo said that if an agreement to extend or amend the USMCA is not reached, it will enter a mandatory annual review period until 2036, after which the agreement will expire, leading to “perpetual trade policy uncertainty.”

“If NAFTA eventually disintegrates, the three parties could return to bilateral trade agreements to maintain each other’s market access, but this will impose costs on North American trade and investment.”

“A triumph of politics and narrative”

While Carney is keenly aware of the stakes, the visit also has important implications for China.

Najibullah said Beijing was not only seeking new export markets and removing trade restrictions such as electric vehicle tariffs, but also seeking “political and narrative victories.”

China has often criticized Canada for following the United States too closely, she said, describing Carney’s visit and any subsequent policy changes as Ottawa’s “attempts to right past mistakes.”

Beijing’s ultimate hope is for Canada to comply on sensitive issues such as Taiwan and the South China Sea.

Earlier this week, two Canadian MPs from Carney’s Liberal Party ended a trip to self-ruled Taiwan, which Beijing claims as its territory, early on the government’s advice.

Lawmakers noted the need to avoid “chaos” in Canadian foreign policy ahead of Carney’s visit.

Najibullah said it was a “worrying” development, adding that Canada would face a “very difficult balancing act” with China.