Canada has agreed to drastically reduce its tariffs on imported Chinese EVs from 100 percent to 6.1 percent as part of a new deal between the two countries. In return, China will be reducing tariffs on Canadian canola seeds from 84 percent to about 15 percent.
The move is a break from the United States, which maintains a 100 percent tariff on EVs from China, effectively banning them in the country. Mexico currently tariffs the vehicles at 50 percent after increasing its rate last year.
Under the agreement, which Canadian Prime Minister Mark Carney called "preliminary," Canada will allow up to 49,000 Chinese EVs into the country, with that number rising to 70,000 after five years. Until now the three major North American trading partners had been aligned in trying to protect their domestic electric vehicle manufacturing. Chinese EV companies benefit from state subsidies , and as such can often be priced at a far better value than domestic alternatives.
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“Our relationship has progressed in recent months with China. It is more predictable and you see results coming from that,” Carney said to reporters . A warmer relationship may be forming in response to the Trump administration's tariff policies , with China hoping that alienated nations may seek a better relationship with the Eastern power.
As to concerns that cheaper electric vehicles from China could hurt the Canadian auto market, the prime minister was unconcerned, saying "it’s still in low, single-digit proportion of the size of the Canadian auto sector," Carney added, “Canadians buy about 1.8 million autos a year.” China remains Canada’s second-largest trading partner after the United States.