Is the North American blockade on Chinese EVs easing? Today, Canadian Prime Minister Mark Carney unveiled a deal with China aimed at reducing tariffs on electric vehicles in return for lower duties on canola products. Carney mentioned that Canada will initially permit up to 49,000 Chinese EVs with a 6.1 percent tariff, although the exact timeline remained unclear.
This announcement follows President Donald Trump’s recent indication that he might be open to allowing Chinese EVs into the US, despite the ongoing trade war with China and persistent worries about its effects on domestic automakers. At a Detroit event, Trump welcomed the idea of Chinese automakers entering the US market as long as they establish factories here and employ American workers.
China stands as the world’s largest car market, with its automakers selling more electric vehicles than nearly all other countries combined. The Chinese market is particularly recognized for its ability to produce extremely affordable EVs, something other countries have struggled to achieve. With their massive output of EVs, Chinese manufacturers are currently engaged in a fierce price war and have been ramping up exports to manage their overflowing inventories.
Canada isn’t the first North American country to permit imports of Chinese vehicles. For the past few years, Mexico has been bringing in Chinese cars from brands like BYD, Chery, and Neta. While BYD has considered building a factory in Mexico, those plans seem to be on hold for now.
With Canada now opening its doors to Chinese automakers, the focus shifts to whether companies like BYD and Geely might soon enter the US market. The US auto industry has deep connections with both Canada and Mexico; however, Trump’s tariffs have strained these relationships. Currently, around 5.3 million vehicles are produced in Canada and Mexico, with 70 percent intended for the US market.
