Canada Slashes Tariffs on Chinese EVs, Breaking From US

Historically, tariff policy in the United States and Canada has taken a protectionist stance against Chinese automakers. That’s about to change for one of the countries in question. As Electrek’s Fred Lambert reports, Canada is set to lower its tariff rates on Chinese electric vehicles from 100% to just over 6% — essentially the economic policy version of going from zero to 60, but in reverse.

Electrek reports that a new trade agreement between Canada and China will allow 49,000 Chinese-made EVs into Canada each year, with a tariff rate of just 6.1%. To put that number into context, the publication Driving reports that 1.9 million new vehicles were sold in Canada last year.

Canada’s shift in policy will move them away from the tariff policies of the U.S. (where Chinese EVs are subject to a 100% tariff) and closer to those of other North American countries. That could have big implications for the industry; according to a recent article in Mexico News Daily, Chinese automobiles now make up around 20% of the cars, trucks and SUVs sold in the country in question. And while Canada is not as populous as Mexico, gaining access to North America’s third-largest automotive market remains a big deal.

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Several factors are at work here

In a statement, the Canadian government made it clear that they see this shift in policy as a precursor to something larger. “It is expected that within three years, this agreement will drive considerable new Chinese joint-venture investment in Canada with trusted partners to protect and create new auto manufacturing careers for Canadian workers, and ensure a robust build-out of Canada’s EV supply chain,” a press release from the office of Prime Minister Mark Carney noted.

The same announcement also gave some specifics about what Canadian consumers can expect: the goal is that, in five years’ time, “more than 50% of these vehicles will be affordable EVs with an import price of less than $35,000.” That’s encouraging news for both EV enthusiasts and Canadian drivers looking for more economical options.

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Tobias Carroll

Tobias Carroll lives and writes in New York City, and has been covering a wide variety of subjects — including (but not limited to) books, soccer and drinks — for many years. His writing has been published by the likes of the Los Angeles Times, Pitchfork, Literary Hub, Vulture, Punch, the New York Times and Men’s Journal. At InsideHook, he has…