Ottawa told Washington about eased Chinese EV rules, which helps explain Trump’s muted response
Canada briefed the U.S. on a deal to ease tariffs on Chinese electric vehicles. The agreement allows 49,000 imports at a 6.1% tariff and ties growth to Chinese investment in Canada.
Copy link
By Torontoer Staff
Canada informed senior U.S. officials about its agreement with China to roll back steep EV tariffs, a move Canadian insiders say helps explain the muted reaction from President Trump. The deal will allow 49,000 Chinese electric vehicles into Canada this year at a 6.1 per cent tariff, down from 100 per cent.
Ottawa says the import concession is conditional on Chinese automakers making significant investments in Canada, including joint ventures and use of Canadian workers, with the longer term aim of developing a domestic EV industry.
How Washington was briefed
Kirsten Hillman, the outgoing Canadian ambassador to Washington, played a role in informing the Trump administration, according to senior Canadian officials who spoke on condition of anonymity. Those officials said the discussions were kept to a very small circle at the top of government.
We didn’t take anybody by surprise but we needed to have a deal, and obviously there were conversations.
a senior Canadian official
Jamieson Greer, the U.S. trade representative leading parts of the Trump trade strategy, was described by one source as initially neutral when told of the negotiations. Greer later warned publicly that Canada would regret easing access for Chinese EVs, while the White House response remained low key.
The deal in numbers
- 49,000 Chinese EVs allowed into Canada in 2026 at a 6.1 per cent tariff, down from 100 per cent.
- The 6.1 per cent rate matches Canada’s most favoured nation tariff level for countries without a free-trade agreement.
- Imports are slightly higher than about 45,000 vehicles in 2023, which were mainly Tesla and Volvo models made in China.
- China agreed to roll back many punitive tariffs on Canadian agricultural goods to a combined 15 per cent starting March 1, though a 25 per cent pork tariff remains.
- Canada has sought reinstatement of certification for Canadian pork establishments.
Why Ottawa says the move is strategic
Federal officials framed the agreement as part of a broader strategy to attract Chinese investment and to build a Canadian EV supply chain. The government says Chinese carmakers would expand the import quota only after committing to substantial production investment in Canada.
The goal, officials say, is to transfer expertise and technology to Canada so the country can develop its own manufacturing capability and access other markets tariff free, reducing exposure to U.S. protectionist measures.
Let’s not think that President Trump will not allow Chinese EVs to come into the U.S. That is the fundamental error that many in the auto sector are making.
a government insider
Officials point to Canadian companies such as QNX, which provides automotive software, as assets that could let vehicles built with Chinese hardware meet Canadian data and security standards.
Industry and political context
The 2024 dispute began when Canada matched U.S. tariffs, imposing a 100 per cent duty on Chinese-made EVs and 25 per cent on Chinese steel and aluminum. China retaliated with steep tariffs on Canadian canola, seafood and other goods. Friday’s deal eased most of those trade penalties, but some tariffs remain.
Automakers are watching closely. Ottawa expects companies already making EVs in China, such as Tesla and Ford, to be early users of the reopened Canadian market. One Canadian official said Ford’s reaction to the announcement was positive, suggesting the company recognised a trafficking route into Canada that does not exist in the U.S.
Officials acknowledge significant political work remains to get provincial leaders and autoworkers to embrace the plan. The government plans to release a revamped auto strategy in February, which it says will help explain the path forward.
The only way to counter U.S. protectionism is if Europe and Asia and us create a new market for ourselves without too many tariffs. If we’re able to do that, Trump’s strategy doesn’t work.
a senior Canadian official
Diplomacy and next steps
Canada’s discussions with China began in earnest after a Canada-China meeting at the Asia-Pacific Economic Cooperation summit in October. Chinese President Xi Jinping described the meeting with Prime Minister Mark Carney as marking a 'turnaround' in relations, and both leaders signed a joint statement laying out a road map for cooperation across trade, energy, agriculture and other areas.
Two-way trade between Canada and China is nearly $120 billion annually. Canada has set a target to increase exports to China by 50 per cent by 2030. The government says the tariff changes and the new strategic partnership are intended to drive that growth.
President Trump is expected to visit China in April. Canadian officials say they briefed U.S. counterparts about the talks, but say the full timeline of when Washington was told remains a close hold.
The agreement shifts the immediate landscape for North American EVs, but its success depends on whether Chinese investment materialises in Canada, whether auto workers and provinces accept the plan, and how Washington responds as trade and diplomatic calendars unfold.
tradeautosChinaelectric-vehiclesdiplomacy
