- Canada has reduced its tariff on imported Chinese electric vehicles from 100% to 6.1%.
- The maximum imports are 49,000 cars in the first year, rising to 70,000 by the fifth year.
- Some Canadian politicians aren’t very happy with the deal, citing concerns about cybersecurity and damage to Canada’s relationship with the U.S., and several U.S. officials have expressed concerns as well.
Once upon a time, the United States and Canada moved almost completely on manufacturing issues – especially when it came to the automobile industry. Automobiles, parts, and manufacturing are closely tied together on both sides of the border, so what was good for one country has long been considered good for another.
But that partnership saw its biggest collapse yet this week Canada has reached an agreement to reduce tariffs by 100% on electric vehicles imported from Chinaopening North America’s deeply intertwined automobile industry to a whole new level of competition.
To be sure, this break in policy is not entirely unprecedented. Since President Donald Trump took office last year, Canada’s relationship with the United States has deteriorated He was incredibly disturbedwhere Trump openly challenged Canada’s sovereignty while frequently imposing tariffs Experts say its goal is to push Canada into submission. In the midst of those trade battles with the United States, Canada has been open about its desire to secede from its neighbor to the south.
But it started Alcohol This idea has trickled down to the auto market, and while many cost-strapped Canadian buyers may rejoice at the idea of options over $35,000 (about $25,000 USD), this development is not seen as a win by everyone.
Photo by: Disclosure
Doug Ford, Ontario’s premier, has been frank to The Canadian Press about how concerned he is, both in terms of international relations and what he described as potential threats to national security.
“It’s just a terrible, terrible, wrong decision by the prime minister,” he added. Ford said at a press conference After the country’s leader, Mark Carney, sealed the deal in Beijing. “This is a wound inflicted on an already damaged Canadian auto industry. Finding a solution to tariffs on American cars is becoming more difficult.”
Ford’s claim is understandable. As a Conservative, he is on the other side of the fence as Carney’s Liberal, but the district he represents includes Canada’s largest auto manufacturing sector. The area extending from Windsor to Toronto is Known as the Ontario Motorway Corridor Because it is the power of the automobile industry. But it has It has diminished in recent yearsNew competition from cheap Chinese imports will likely destroy jobs and production in the region.
Ford also echoed these concerns Which is shared by many American politicians– That Chinese cars can do this one way or another Spying on Western drivers Sensitive areas such as military bases. Ford even said there’s a possibility that these electric vehicles may not be able to drive into the US due to “spyware” built into the cars.
Ford isn’t the only one who isn’t so optimistic. Mike Murphy of the American EV Jobs Coalition, a nonpartisan group Encourages electric vehicle adoption across party linesHe said in a statement that he feels the outcome is the result of the Trump administration’s failure in its trade deals with Canada. Murphy said the pivot is the result of trade deals that do not prioritize American interests.
“American automakers and autoworkers are stuck in the middle of the most expensive industrial transformation in a generation,” Murphy said. “Automakers, both American and those of our democratic allies who proudly make cars here, are investing billions to build affordable electric cars here at home, retrain workers, and retool factories. These efforts are undermined by trade instability, unclear rules, and a hostile stance toward our closest trading partners in North America and Europe.”
Is this just saber rattling? maybe. The commercial deal caps a maximum of 49,000 vehicles in its first year, expanding to 70,000 within five years. According to what was reported by CBCThis represents only about 3% of the Canadian automobile market. It’s also the same number of Chinese-made cars that were once sold in Canada before it imposed a 100% tariff on Chinese electric vehicles in 2023.
But three years is a long time in the world of electric cars. It is very plausible that any new Chinese imports coming to Canada in 2026 and beyond will be as well Well made, high tech and high rangeand not just cheap alternatives to the Hondas, Fords and Chevrolets that Canadians drive.
Photography: BYD
It remains to be seen which Chinese car brands will be the first to put cars on the road. Canada’s new rate for imported Chinese electric vehicles is now 6.1%, with the goal of getting cars worth less than C$35,000 (US$25,000) on Canadian roads. From this kind of data, I would expect cars like BYD Nawras Or a dolphin to appear, and perhaps fewer cars like Dollar Zeekr rises 7x Or any kind of Denza.
Meanwhile, Unifor, Canada’s largest private sector union, criticized the move, saying it threatens “the future of the entire auto sector.”
“This is a self-inflicted wound to an already damaged Canadian auto industry,” said Unifor national president Lana Payne He said in a statement. “Providing a foothold for cheap Chinese electric vehicles, backed by massive government subsidies, over-production and designed to expand market share through exports, puts Canadian auto jobs at risk while rewarding labor abuses and unfair trade practices.” Payne also said the move would only exacerbate trade tensions with the United States
South of the border, many U.S. officials also criticized the decision, saying it represented a major push to undermine North American auto production and eventually break into the U.S. market as well.
“I think they will look at this decision and certainly regret it to bring Chinese cars into their markets,” US Transportation Secretary Sean Duffy said. He said at an event With other government officials at an automobile plant in Ohio. During the same tour, US Trade Representative Jamison Greer said that Trump intends to continue to “protect this market” from Chinese electric vehicle imports.
But the president struck a different tune on Friday, days after he repeated it Interest in Chinese automakers building cars in the United States.
“That’s OK, that’s what he should do,” Trump said of Carney. During an event In the White House. “It’s good for him to sign a trade deal. If he can get a trade deal with China, he should do it.”
The first wave of imports could arrive in March or April. Officials said. In a way, it feels like a big domino just fell in North America, and it won’t be the last.
Contact the author: kevin.williams@insideevs.com
Additional reporting by Patrick George
