Canada is going to start importing Chinese EVs — will the US follow?
Is the North American blockade on Chinese electric vehicles easing? Today, Canadian Prime Minister Mark Carney announced a deal with China to reduce tariffs on electric vehicles in exchange for reduced duties on canola products. Canada will initially allow up to 49,000 Chinese electric vehicles at a 6.1% tariff, Carney said, although the exact timeline is unclear.
The news comes days after President Donald Trump signaled his willingness to allow Chinese electric vehicles into the United States, despite his administration’s ongoing trade war with China and long-standing concerns about the potential impact on domestic automakers in the United States. At an event in Detroit, Trump said Chinese automakers would be welcome as long as they build factories in the United States and hire American workers.
China is the world’s largest auto market, and Chinese automakers sell more electric vehicles than virtually all other countries combined. The country is particularly famous for cracking the code for extremely cheap electric vehicles – the type that has eluded competitors in other countries. China makes so many electric vehicles that the country’s automakers are engaged in a fierce price war and are increasingly exporting their vehicles to other countries to reduce their bloated inventories.
Canada would not be the first North American country to authorize imports of Chinese cars. Mexico has been importing Chinese vehicles for several years, including brands like BYD, Chery and Neta. BYD plans to build its own factory in Mexico, although those plans appear to be on hold.
But now that Canada is opening the door to Chinese automakers, the question is whether BYD, Geely and other Chinese companies could soon come to the United States. The U.S. auto industry is deeply intertwined with that of Canada and Mexico, although Trump’s tariffs have soured relations with America’s northern and southern neighbors. About 5.3 million vehicles are built in Canada and Mexico, 70 percent of which are destined for the United States.
