Preferential access for foreign automakers may face limits

The article reports the federal government has exempted up to 49,000 Chinese electric vehicles a year from a 100-per-cent surtax and that Ottawa is reported to be planning preferential market access for automakers that produce in Canada; full details of the proposed Auto Pact II have not been released.

Canada is proceeding with new measures that affect how some foreign-made cars enter the domestic market. The government announced an exemption allowing up to 49,000 Chinese electric vehicles per year to enter at Canada’s regular tariff rate rather than the 100-per-cent surtax, with that quota planned to rise to 70,000 by 2030. Media reports say Ottawa is preparing a preferential market-access scheme for automakers that commit to producing vehicles in Canada. The author notes that the current trade and tariff landscape differs from past decades, and that many operational details have yet to be published. Key facts: - The federal government has exempted up to 49,000 Chinese electric vehicles per year from the 100-per-cent surtax and will apply the regular 6.1 per cent tariff instead, with a planned increase to 70,000 by 2030. - Media reports state Canada is planning to give preferential market access to automakers that produce vehicles in Canada. - A large share of Canadian-made vehicles has historically been exported to the United States, and current U.S. trade measures and tariffs limit unfettered access to that market. - Officials have not released full details or timelines for the proposed Auto Pact II; program rules and next procedural steps remain undetermined. Summary: The reported actions combine a tariff adjustment for a set number of Chinese electric vehicles with a proposal to offer market access advantages to manufacturers that build in Canada. Because access to the U.S. market is not guaranteed and the Auto Pact II’s rules and timelines have not been published, the outcomes and next steps are undetermined at this time.