Canada may reduce EV tariffs if China lifts canola and seafood restrictions
Automakers warn decision could trigger U.S. backlash and harm North American industry
Carney’s Beijing visit includes talks with Xi, Li, and top Chinese officials
Canadian officials are engaged in ongoing discussions with China about reducing or removing tariffs on Chinese EVs in return for the easing of Chinese countermeasures on Canadian agricultural exports.
Saskatchewan Premier Urges Ottawa to Scrap Tariff on Chinese EVs
The negotiations are taking place ahead of Prime Minister Mark Carney’s visit to Beijing, where he is scheduled to meet with Chinese President Xi Jinping, Premier Li Qiang, and other senior officials. The Canadian government has characterized the talks as part of a long-term effort to resolve trade disputes with China.
An unnamed senior Canadian official said the government has made a “concerted effort to address trade irritants systematically.” The discussions follow diplomatic engagements between Carney and Chinese leaders during the United Nations General Assembly and the Asia-Pacific summit in 2025.
The talks come at a time when Canada is dealing with complex trade issues with the United States, which has imposed strict measures to limit the import of Chinese EVs over concerns related to subsidies and cybersecurity risks. Canadian officials have not publicly commented on how the negotiations with China may affect relations with the U.S., which remains Canada’s largest automotive trading partner.
In the fall of 2024, Canada introduced 100 % tariffs on Chinese EVs and 25 % tariffs on Chinese steel and aluminum, mirroring U.S. actions. The decision prompted China to impose counter-tariffs on Canadian agricultural goods, which have drawn criticism from prairie provinces reliant on those exports.
Industry groups have warned that easing EV tariffs could undermine the North American auto industry and complicate upcoming negotiations on the renewal of the Canada-U.S.-Mexico trade agreement.
“There is no fair competition with the Chinese automotive industry,” Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association said, citing state subsidies and global vehicle dumping as key concerns. He pointed to job losses in Europe as a cautionary example of easing restrictions on Chinese EVs.
Flavio Volpe, president of the Canadian Auto Parts Manufacturers’ Association, said talks with China must be approached with “extreme caution,” noting that Chinese EV makers often operate on a knock-down basis that allows them to retain a low-cost structure even when assembling vehicles abroad.
Both Kingston and Volpe cited national security concerns, referencing U.S. actions to restrict Chinese-connected vehicle software and asserting that Canada should adopt similar safeguards.
Carney’s visit to Beijing includes bilateral meetings and an official dinner hosted by Premier Li. Canadian officials have said they do not expect to resolve all outstanding trade issues during the trip but hope to establish a stronger foundation for continued engagement.
Source: Toronto Star
