Global Automakers of Canada Concerned About Allowing Chinese EVs Into the Country

The government's decision to facilitate the sale of some Chinese electric vehicles (EVs) in Canada is cause for “cautious concern” according to Global Automakers of Canada (GAC), a lobby group representing automakers from Europe, Japan, and Korea.

Meanwhile, Prime Minister Mark Carney described the decision to allow up to 49,000 Chinese EVs into Canada at a tariff rate of just 6.1 per cent as a “preliminary but landmark agreement between the countries.

“It’s a partnership that reflects the world as it is today, with an engagement that is realistic, respectful and interest-based,” Carney said a news conference in Beijing today, per Autonews.

The new arrangement effectively opens the door to EVs built in China entering the Canada. While the vehicles were not banned previously, a 100 per cent tariff on them made importing EVs from China too costly to consider, in many cases.

In return for lowering the tariff on some vehicles, China has agreed to drop “anti-discrimination” tariffs against canola meal, lobsters, crabs, and peas. The moves mark a thawing of relations between Ottawa and Beijing.

Canada followed former U.S. President Joe Biden’s decision to impose 100 per cent tariffs against Chinese EVs, among other products, two years ago, in order to support the growth of a robust North American EV manufacturing segment. The move prompted retaliation from China, whose auto sector has grown quickly, allowing it to build cheap EVs that some fear could destabilize automotive industries in other parts of the world.

However, since then, U.S. president Donald Trump has launched trade disputes with most of the world, including Canada. That has led Prime Minister Carney to embark on a mission to double non-U.S. exports by 2030. Despite that, the trade aggression has left Canada’s automotive industry vulnerable.

“This announcement just adds one more piece of uncertainty into a highly uncertain environment,” said David Adams, GAC president and CEO.

However, Adams recognized that this is “one piece of a larger strategic automotive puzzle” that needs to be understand by its members.