Canada to Allow Capped Chinese EV Imports for Lower Tariffs on Canadian Goods

• Prime Minister Mark Carney announced Canada will allow a limited number of Chinese electric vehicles (EVs) into its market and seek Chinese joint-venture investments in its auto sector.
• This policy shift follows a trade agreement with China, reducing Canada's EV tariff from 100% to 6.1% and setting an initial annual cap of 49,000 Chinese EVs, expanding to 70,000 over five years.
• In return, China will significantly cut tariffs on Canadian agricultural exports, including canola seeds (from 84% to 15%) and other products, unlocking nearly $3 billion in export orders.
• Carney stated this move aims to position Canada as an EV manufacturing hub, provide affordable options for Canadians, and aligns with a net-zero emissions future.
• The decision marks a departure from US policy on Chinese EVs but was welcomed by US President Donald Trump; Carney emphasized the limited quota allows for a smooth domestic transition.

Why It Matters: Canada will permit capped Chinese EV imports and seek investments in exchange for lower tariffs on its agricultural exports.