We present X-ray spectral fits to a recently obtained Chandra grating spectrum of Eta Carinae, one of the most massive and powerful stars in the Galaxy and which is strongly suspected to be a colliding wind binary system. Hydrodynamic models of colliding winds are used to generate synthetic X-ray spectra for a range of mass-loss rates and wind velocities. They are then fitted against newly acquired Chandra grating data. We find that due to the low velocity of the primary wind (~500 km/s), most of the observed X-ray emission appears to arise from the shocked wind of the companion star. We use the duration of the lightcurve minimum to fix the wind momentum ratio at 0.2. We are then able to obtain a good fit to the data by varying the mass-loss rate of the companion and the terminal velocity of its wind. We find that Mdot ~ 1e-5 Msol/yr and v ~ 3000 km/s. With observationally determined values of ~500-700 km/s for the velocity of the primary wind, our fit implies a primary mass-loss rate of Mdot ~ 2.5e-4 Msol/yr. This value is smaller than commonly inferred, although we note that a lower mass-loss rate can reduce some of the problems noted by Hillier et al. (2001) when a value as high as 1e-3 Msol/yr is used. The wind parameters of the companion are indicative of a massive star which may or may not be evolved. The line strengths appear to show slightly sub-solar abundances, although this needs further confirmation. Based on the over-estimation of the X-ray line strengths in our model, and re-interpretation of the HST/FOS results, it appears that the homunculus nebula was produced by the primary star.