In a surprising shift in global trade policy, Canada has cut its huge 100 per cent tariff on electric vehicles (EVs) from China to just 6.1 per cent.
This change breaks long-standing alignment with the United States and opens the Canadian auto market to exciting, more affordable EV options.
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| EVs from big Chinese brands like BYD are set to cost as low as CAD $35,000. |
The decision could affect EV buyers, car makers, farmers, and global trade — making it big news for consumers and businesses alike.
What changed: Huge tariff cut by Canada
Until now, Canada followed the US in charging a 100 per cent tax on electric vehicles made in China.
This tariff made it nearly impossible for Chinese EV brands to sell cars in Canada.
It was part of the broader trade tensions and attempts to protect North American automakers.
Now, that has changed. Canada will allow:
Up to 49,000 Chinese EVs per year
Entry at a 6.1 per cent tariff instead of 100 per cent
A focus on low-cost models that can be truly affordable
This quota equals about the number of EVs China exported before tariffs took effect, and it makes up less than 3 per cent of Canada’s vehicle market.
However, it’s still a major policy shift.
Why this matters for Canada EV buyers
Canada’s decision could mean cheaper electric cars for consumers. Many Chinese brands are known for producing high-quality EVs at much lower prices than competitors.
Some models may sell for less than CAD $35,000 in the coming years — prices that appeal to many first-time EV buyers.
For Canadian drivers frustrated with high EV costs, this is big news.
What Canada gets in return
This tariff cut didn’t happen in isolation. Canada negotiated this change with China as part of a broader trade deal.
In exchange, China agreed to:
Reduce its tariff on Canadian canola seeds from about 84 per cent to 15 per cent
Lift restrictions on seafood exports, including lobsters and crabs
Remove duties on peas and canola meal by at least the end of the year
This cooperation helps Canadian farmers get back into China’s massive agricultural market after years of export losses.
Canada’s strategic shift in trade policy
Canada Prime Minister Mark Carney described the agreement as a “strategic” partnership with China that reflects changing global trade realities.
Since China is one of the world’s fastest-growing EV makers, Canada’s new policy signals a willingness to balance economic interests, even if it means departing from US trade positions.
The move also aims to attract Chinese investment in Canada’s EV supply chain, potentially boosting the domestic auto industry by creating jobs and new manufacturing opportunities.
Reaction from around the world
This shift has stirred reactions:
The United States says the decision is “problematic”, worrying and could hurt Canadian workers and disrupt the North American auto policy
Canadian leaders emphasise the need for trade diversification and growth outside reliance on a single partner
Some critics fear that welcoming Chinese EVs too quickly could challenge North American automakers
Whatever the opinions, this change marks a clear break from past trade policy.
Canada is choosing affordability and broader trade ties over strict alignment with US protectionism
E-Vroooom’s views
What happens next?
Here’s what to watch out for:
Will Chinese EV brands start selling cars in Canada this year? Could joint ventures or factories come to Canada? How will US–Canada relations evolve on trade? Will Canadians see cheaper EVs soon?
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