- Canada has agreed to cut tariffs by 100% on Chinese electric vehicles in exchange for a reduction in tariffs on Canadian agricultural products.
- The decision was made during Prime Minister Mark Carney’s visit to Beijing to improve strained relations between Canada and China.
- The move bucks the US’s anti-China tariff agreement, and opens the doors to more affordable electric vehicle imports — perhaps around $35,000 CAD, or $25,000 USD.
The Chinese auto industry received the green light to make a deeper foray into North America on Friday as Canada agreed to cut 100% tariffs on Chinese-made electric vehicles, opening the door to cheap imports and potentially upending that continent’s auto industry.
According to To the Associated PressCanadian Prime Minister Mark Carney announced that tariffs against Chinese electric vehicles will be reduced after two days of meetings with Chinese leaders in Beijing. In exchange for reducing customs duties on electric vehicles, Canada agreed to do so Reducing tariffs on Canadian agricultural goodsIncluding canola seeds.
But imports of Chinese electric cars will not flow into the country yet. The deal includes an initial annual limit of 49,000 vehicles for Chinese EV exports to Canada, though that grows to about 70,000 over five years, Carney said. Canadians buy about 1.8 million cars a year, roughly a tenth of the sales volume in the United States, Carney said.
However, the move represents a major break between Canada and the United States, which once moved closely to protect North America’s deeply intertwined auto industry.
Carney, according to the Associated Press, described the move as part of the growth of a whole new auto sector, and a victory for Canadians looking for affordable new car options at a time when prices are at record highs. He added that most of these cars will have an import price of less than 35,000 Canadian dollars, or about 25,000 US dollars. Average price of a new car It costs about $63,000 CAD.
“We are building a new segment of our auto industry, building the cars of the future in partnership, providing affordable vehicles to Canadians at a time when affordability is top of mind, and doing so at a scale that allows for a seamless transition in this sector,” Carney said.
The deal is groundbreaking on several levels. First and foremost, this represents arguably the largest automotive rupture in trade relations to date between the United States and Canada, whose close ties have been severely strained in the era of President Donald Trump’s tariffs and rhetoric about the country. To become the “51st state.”
Previously, Canada worked with the United States Imposing 100% tariffs on Chinese-made electric cars As a way to protect the North American automobile industry. Automakers and suppliers of parts and other components for the auto business operate between the two countries, and the growth of Chinese imports into Canada was widely seen as a threat to the operations of companies like General Motors, Ford, Honda, Toyota, etc., which collectively employ millions of people in both countries.
It’s not clear which Chinese automakers, if any, could announce a move toward Canadian imports. In theory, doing so would be the first step toward more local production in North America, a long-sought goal for Chinese companies keen to expand on this continent and its huge auto market. Also sales in China Slowing down after years of explosive growthMost major Chinese automakers are seeking to grow by expanding into Europe, Latin America, the Middle East and Africa.
In Detroit Earlier this weekTrump has also expressed openness to Chinese automakers coming to the United States, as long as they make cars in the United States as well. “If they want to come and build a factory and hire you and hire your friends and neighbors, that’s great, and I love that,” Trump said during a meeting of the Detroit Economic Club. “Let China in.”
Contact the author: patrick.george@insideevs.com
