BUSINESS

Canada Axes Tariffs on Chinese EVs in Reset of Ties

Published: Jan. 19, 2026 7:50 p.m. GMT+8

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Canada will allow up to 49,000 Chinese electric vehicles (EVs) to enter its market annually at the most-favored-nation tariff rate of 6.1%, signaling a reset in its relationship with Beijing.

The Office of the Prime Minister of Canada announced the policy shift on Friday. It coincides with Prime Minister Mark Carney’s official visit to China, the first by a Canadian leader in eight years.

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Canada will allow up to 49,000 Chinese EVs annually at a 6.1% tariff, replacing a former 100% levy, and seeks to boost EV joint ventures domestically.
The quota matches recent import volumes, accounts for under 3% of Canada’s car market, and aims to keep over 50% of imports under C$35,000.
This move diverges from U.S. policy; U.S. keeps a 100% tariff, while Canada resets relations and market conditions for Chinese automakers.

AI generated, for reference only

Who’s Who

Tesla Inc.: Tesla Inc. currently dominates Chinese EV exports to Canada. The new Canadian quota system will allow up to 49,000 Chinese EVs annually at a 6.1% tariff rate, superseding a 100% punitive tariff. This policy change is expected to benefit Tesla while potentially opening the market for other Chinese brands.

Polestar: Polestar, a brand known for its electric vehicles, contributes a smaller volume of Chinese EV exports to Canada, compared to Tesla Inc. With Canada's new quota system, Polestar may find market conditions conducive to expanding its presence there.

Volvo Cars: Volvo Cars is mentioned as one of the brands, alongside Polestar and Tesla Inc., that currently exports pure electric cars from China to Canada. These exports contribute to the overall volume of Chinese EVs entering the Canadian market.

DesRosiers Automotive Consultants Inc.: DesRosiers Automotive Consultants Inc. (德斯罗西耶汽车咨询公司) is a consultancy that projects Canada's total auto sales will increase by 2% to 1.9 million units in 2025. They also estimate that electric vehicles (EVs) will constitute between 12% and 14% of the Canadian auto market in the same year.

AI generated, for reference only

What Happened When

2023：: Canada imported approximately 44,000 pure electric cars from China.

2023 and 2024：: Chinese EV exports to Canada averaged approximately 49,000 units annually, corresponding to the new quota.

September 2024：: The U.S. imposed a 100% levy on Chinese EVs, citing unfair subsidies.

Oct. 1, 2024：: Canada implemented a punitive tariff of 100% on Chinese electric vehicles.

By 2025：: DesRosiers Automotive Consultants projects Canada's total auto sales will rise 2% to 1.9 million units, with EVs making up 12% to 14% of the market.

Tuesday, January 13, 2026：: President Donald Trump stated at the Detroit Economic Club that he would welcome Chinese automakers building plants in the U.S. if they hire American workers.

Wednesday, January 14, 2026：: Prime Minister Mark Carney arrived in Beijing for an official visit.

Friday, January 16, 2026：: The Office of the Prime Minister of Canada announced the new EV quota policy and released a joint statement with China declaring a new phase in bilateral relations.