Nothing brings two countries together quite like a shared frustration with Washington and a few million barrels of oil.
Driving the news: China has been buying a record amount of Canadian oil, with a high of 7.3 million barrels exported to the country in March. The surge in Canadian shipments comes as China’s U.S. oil imports have plummeted nearly 90%.
- The extra business from China certainly helps soften the blow of sluggish Canadian oil exports to the U.S., which fell by ~18% in the first four months of the year.
Why it matters: Despite icy diplomatic tensions over the last few years, Ottawa and Beijing have become allies of circumstance thanks to Trump’s tariff war. The record oil imports could signal cozier ties ahead between Canada and its second-largest trading partner.
- Last month, Prime Minister Carney and Chinese Premier Li Qiang agreed to improve economic ties, while Canada’s premiers urged Ottawa last week to “reset” relations with China and explore more trade.
- Strengthening that trade relationship would likely start with lowering or abandoning their tit-for-tat tariffs, particularly the 100% levies on Chinese EVs and Canadian canola products.
Bottom line: The U.S. has put Ottawa in the difficult position where it can no longer afford to distance itself from China. As B.C. Premier David Eby said last week: “We don’t want to get crushed between the two biggest economies in the world.”—LA