Reports Indicate Canada is Poised to Lift Tariffs on EVs from China

Canada has initiated a formal review of its 100% tariff on electric vehicles imported from China, with speculation mounting that the measure could be eliminated as Prime Minister Mark Carney prepares to meet Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation summit. The reassessment represents a potential departure from Washington’s trade stance and could reshape North American automotive competition. 

Ottawa imposed the tariff in October 2024, citing concerns that Chinese manufacturers benefited from state subsidies and unfair production practices. Beijing responded with retaliatory measures in March and August 2025, imposing duties on Canadian agricultural products including canola oil, oil-cakes, peas, and a preliminary 75.8% anti-dumping duty on canola seed announced in August. Saskatchewan saw exports to China plummet 76% in August compared to the previous year following these Chinese duties. 

Canadian Foreign Minister Anita Anand and Chinese counterpart Wang Yi met October 17 in Beijing to address bilateral trade disputes. According to Canada’s foreign ministry statement, discussions covered agriculture and agri-food products including canola alongside electric vehicles. Beijing’s readout indicated that China is inclined to cooperate with Canada, resume dialogue and resolve legitimate concerns from both nations. 

Trade tensions have intensified following President Trump’s announcement last weekend that he suspended negotiations with Canada over Ontario advertisements featuring President Reagan criticizing tariffs. This breakdown in U.S.-Canada trade discussions has accelerated expectations that Ottawa will pivot toward Beijing. Speculation now suggests that the two countries might finalize new trade agreements during the summit. 

Rumors point to China potentially lifting restrictions on Canadian canola and pork exports in exchange for tariff elimination on Chinese electric vehicles. In the Prairie regions, where a large portion of Canada’s canola production occurs, provincial governments have pressured Ottawa to resolve the situation. They argue that China’s effective closure of the Canadian canola market threatens a sector that’s worth approximately C$5 billion ($3.58 billion) in exports during 2024. 

On the other hand, the Automotive Parts Manufacturers’ Association says reducing the EV tariff could expose Canada’s market to heavily subsidized low-cost Chinese electric vehicles. Canada initially aligned Chinese EV tariffs with United States policy, but Ottawa’s reconsideration signals a possible divergence from Washington’s approach. Analysts indicate that easing the tariff would grant Chinese automakers access to Canadian markets, potentially disrupting domestic manufacturing. 

Tesla would likely emerge as an immediate beneficiary in the short term as it resumes deliveries of Shanghai-manufactured vehicles to Canada. In the meantime, Foreign Minister Anand says that regular and candid communication will be key to building trust, enhancing cooperation, and tackling respective concerns between Canada and China. 

Players in the North American auto industry, such as Massimo Group (NASDAQ: MAMO), will be following how the talks between Canada and China resolve the EV dispute between those two countries as any decision reached could reshape the auto market in the region. 

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