It didn’t exactly require a PhD in economics to predict that Donald Trump blowing up our trading relationship with countries we previously considered allies would only encourage those countries to work more closely with China. And that goes double for Canada, since Trump also reneged on the terms of the free trade deal he so proudly negotiated with them in his first term, while also loudly proclaiming that Canada should give up its sovereignty and become the 51st state. So it shouldn’t be much of a surprise that InsideEVs reports Canada is considering dropping its 100% tariff on Chinese EVs.
If Canada does go through with dropping its tariff on Chinese EVs, it would be about more than just making EVs more affordable for Canadians. The goal would be to get China to drop the 100% tariff it placed on Canadian farm and food products. That would, of course, help farm owners, since they’d be able to sell a lot more of their products, including canola oil and soy beans, to China, while the rest of Canada would benefit from access to more affordable EVs.
That said, it’s far from a done deal and may still not go through. “The prime minister did say there is an EV review. We will see where that leads … the discussions are ongoing,” Canada’s Agriculture Minister Heath MacDonald told CTV News on Tuesday. “We are in a fragile position, but we are here to support the farmer first and foremost, and if that decision has to be made, then that decision has to be made.”
Canadians already approve
While Canada is still debating whether to drop its tariff on Chinese EVs, doing so would likely prove popular. As CTV News points out, a recent poll found 62% of Canadians surveyed “either support or somewhat support removing a 100 per cent tax on all Chinese-made EVs.” Meanwhile, only 29% of Canadians surveyed oppose or somewhat oppose the move.
As Simon Fraser University professor Jonn Axsen told CTV News, Canada is likely headed toward an electric future, regardless of any temporary dips in demand, saying, “It is going to be a more efficient transition if we open up the market to anyone who can provide quality EVs that customers choose to buy. If anyone can enter the market, then there is only more choice for buyers.”
If Canada does open up its country to Chinese EVs, cheap cars such as the BYD Seagull, which sells for about $13,800 in China, would probably still sell for more than they do back home. After all, they’d need to meet Canadian safety requirements, and they’d also need to be shipped over. But they’d probably still undercut the prices for EVs built by legacy automakers that cost far more.
Meanwhile, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, told CTV News, “As much as we don’t like the way the Chinese have build the industry, we know it is the future, so we can’t be running around with a blindspot. But also, giving away part of the market because enthusiasts want Chinese vehicles, well, we should also remember that these enthusiasts don’t employ anyone.”
