EVWire brief: Rumors are suggesting Canada may lift its 100% tariff on Chinese-made electric vehicles as Prime Minister Mark Carney seeks new Asian partnerships amid shifting global trade relations (especially with the US).
Speculations are circulating that Canada may remove its 100 percent tariff on Chinese-manufactured electric vehicles, according to CnEVPost. The speculation comes as Prime Minister Mark Carney begins his diplomatic tour across Asia aimed at strengthening regional partnerships and attending key economic summits.
In August 2024, Canada implemented a 100 percent tariff, on top of the existing 6.1 percent duty, mirroring U.S. measures intended to protect domestic auto manufacturing.
Carney’s travel and meeting itinerary includes Malaysia, Singapore, and South Korea, where he will attend the ASEAN Leaders’ Summit in Kuala Lumpur and the APEC Summit in Gyeongju which began October 31st. Reports suggest that he plans to engage with Chinese officials to discuss potential strategic cooperation opportunities.
A spokesperson for Carney emphasized the prime minister’s intent to “talk to everyone” while pursuing Canada’s economic interests.
Last month, Carney met Chinese Premier Li Qiang in New York, where both parties agreed to maintain communication at the highest levels. Additional discussions could take place at the G20 Summit in South Africa later this year.
During his South Korea visit, Carney will also meet President Lee Jae Myung to explore collaboration in critical minerals, clean energy, and defense. He’s expected to tour the Hanwha Ocean submarine manufacturing facility, a contender for a multibillion-dollar Canadian defense contract.
China has already retaliated against Canada’s earlier tariffs by imposing duties on Canadian canola, seafood, and pork. Despite these challenges, Carney has pushed for a gradual improvement in relations with Beijing, even as Canada navigates complex trade talks with its largest partner, the United States.
Canadian automotive journalist David Booth cautions against eliminating the 100 percent tariff outright. Writing for Driving.ca, he suggests adopting an EU-style approach—setting tariff levels based on how heavily each manufacturer benefits from Chinese government subsidies. For example, in the EU, BYD faces 17 percent tariffs, while SAIC pays 35.3 percent for non-cooperation with regulators.
Booth argues that Canadian tariffs should be “high enough to protect domestic automakers like GM, Ford, Honda, and Toyota BUT STILL competitive enough to encourage fair market pressure.”
Canada’s automotive manufacturing ecosystem has been intertwined with the U.S. Big Three for decades. Components and vehicles often cross the border multiple times during production. Should Canada ease tariffs on Chinese EVs, significant disruption could occur in the U.S. market, particularly if Canadian consumers gain access to affordable models from BYD, NIO, and XPENG.
Something to consider is the potential for Chinese automakers could establish EV assembly plants in Canada, taking advantage of its proximity to the U.S. and access to clean energy and critical minerals.
If the Chinese manufacturers could setup assembly plants in Canada, creating jobs, which in turn stimulates the economy, then wouldn’t this be a win? Sure there is the argument that legacy automakers that have been established in Canada for some time will suffer, but they are already laying people off and what do we owe those companies anyway?
Source: Driving.ca, CleanTechnica.com
