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ForexMedium•13 February 2026•

1 min read

Canada and China Forge Strategic Partnership to Boost Trade and FDI

Donald Trump against maps of the US and Iran, with oil barrels, pipelines, derricks, and upward financial charts amidst flames.

Canada and China have entered into a significant strategic partnership aimed at reducing trade barriers and fostering long-term foreign direct investment (FDI). This two-pronged agreement focuses on immediate tariff reductions to support Canadian trade while paving the way for substantial capital inflows. Projections suggest that Chinese direct investment in Canada could grow to between $90 billion and $100 billion over the next five years. While the tariff relief is expected to provide an immediate boost to trade volumes, the full benefits of the investment surge are anticipated to materialize gradually. Analysts view this development as bullish for the Canadian Dollar (CAD), as improved trade terms and long-term capital commitments strengthen the nation's economic outlook. The agreement marks a pivotal shift in bilateral relations, potentially stabilizing the TSX Index and impacting major CAD currency pairs.