by Potential Change in Canada’s Tariff Policy
Canada is reportedly preparing to cancel high tariffs on electric vehicles from China, which could open the way for mass imports of affordable models. This decision has caused political tension, economic discussions, and irritation abroad, particularly in the United States.
Government Plans and Summit Meeting
Prime Minister Mark Carney, as reported, plans to cancel the 100% tariffs on Chinese electric vehicles that were introduced in 2024 under the previous leadership of Justin Trudeau. This step may be announced in the near future. Initially, the tariffs aimed to protect the Canadian and US automotive industry from subsidized imports, but economic priorities are changing.
Attempt to “Reset” Relations
According to sources in Ottawa, Carney seeks to “reset” relations with China ahead of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea, where he is scheduled to meet with Chinese President Xi Jinping. The result could be improved trade ties and facilitated access for Canadian export goods to the Chinese market.
“Relationships are rebuilt over time, when they… when they have changed, when they have deteriorated,” Carney noted in comments to CBC. “So we have many directions in which we can build.”
Impact on the Electric Vehicle Market
The cancellation of tariffs, which could be reduced to the previous 6.1%, is capable of radically changing the Canadian electric vehicle market. Brands such as BYD, NIO, XPeng, and Zeekr could offer budget options, forcing buyers to reconsider their preferences for expensive models like Tesla or Rivian.
Reaction from the US and Domestic Stakeholders
This step could cause outrage in Washington and from President Donald Trump, as the US maintains a tough stance on the import of Chinese electric vehicles. However, the Carney government likely views this as an opportunity to achieve ambitious electrification goals, considering the shortage of affordable models on the market. Chinese manufacturers with their efficient technology and batteries could become an impetus for the development of the Canadian market.
Challenges for Local Manufacturers
At the same time, local automotive companies and trade unions, which have already suffered from Trump’s tariffs, may oppose this decision. Regions such as Ontario are particularly concerned, fearing competition from low-budget imports.
The potential removal of tariffs reflects broader geopolitical shifts, where trade alliances are being revised due to economic needs. For Canada, this could mean balancing between strengthening relations with China and maintaining good relations with the US, especially in the context of tensions over subsidies and market conditions. The experience of Europe, where Chinese electric vehicles have gained popularity, shows that similar changes can accelerate the transition to clean technologies but will also require adaptation from the local industry.
