Lower tariffs on Chinese electric vehicles may increase adoption and diversify Canada's trade

Canada will cut a 100 per cent tariff on Chinese electric vehicles to 6.1 per cent and replace it with an annual import quota starting at 49,000 vehicles in 2026; China will lower canola tariffs to 15 per cent in return.

Canada has agreed to reduce its 100 per cent tariff on electric vehicles imported from China to 6.1 per cent and to phase in annual import quotas. The quota begins at 49,000 vehicles in 2026 and rises to 70,000 by 2030. The move was negotiated alongside Chinese concessions that include lower tariffs on Canadian canola and the removal of some other tariffs. Officials framed the phased opening as a way to diversify supply chains and support EV adoption without reinstating federal purchase incentives. Key details: - Tariff change and quotas: Canada's 100 per cent tariff will fall to 6.1 per cent and be replaced by annual quotas that start at 49,000 units in 2026 and reach 70,000 by 2030. - Relative scale: The 2026 quota equals roughly 2.5 per cent of new-vehicle sales in Canada, which were just under two million in 2025. - Market context: EVs accounted for about 9 per cent of new vehicle sales in 2025, down from 15 per cent in 2024 after federal purchase incentives ended. - Program and sales data: The Incentives for Zero-Emission Vehicles program cost about $2.6 billion and supported around 546,000 purchases; annual EV sales fell from 264,000 in 2024 to 191,000 in 2025 when rebates lapsed. - Chinese makers: The article mentions more than 100 Chinese EV brands, including BYD, Geely, SAIC Group, Nio and XPeng, and notes several models priced near $30,000. - Trade reciprocity: In exchange for the tariff rollback, China will cut canola tariffs to 15 per cent by March and lift tariffs on several other Canadian goods. Summary: The policy opens Canada's market to a limited number of Chinese electric vehicles over several years while keeping import volumes constrained through quotas. The article reports that the change could expand lower-cost EV options, encourage joint ventures or local assembly, and modestly diversify trade away from near-total reliance on the United States. The quota timeline and the article's recommendation that Canada commit to eliminating quotas by 2030 are highlighted as outstanding policy questions. Monitoring of quota increases through 2030 and trade effects is indicated as the next phase.