- cross-posted to:
- news@lemmy.world
- cross-posted to:
- news@lemmy.world
Prime Minister Mark Carney says he has reached a deal with China to allow tens of thousands of Chinese electric vehicles into the country in exchange for lower canola duties.
He billed his first such trade deal since taking office as a preliminary one that would boost the economy.
Carney says Ottawa expects Beijing to drop canola seed duties to 15 per cent by March.
Canadian canola meal, lobsters, crabs and peas will no longer be subject to Chinese tariffs from March to at least the end of the year.
In return, Canada will allow up to 49,000 Chinese electric vehicles into the Canadian market at a 6.1 per cent tariff rate.
The pact comes just hours after Carney met with President Xi Jinping on a trip to Beijing, ending a multi-year trade dispute that began when the last Liberal government levied EV tariffs to protect Canada’s auto sector.
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Ontario premier went on to say the deal risks “closing the door on Canadian automakers to the American market”
Doing nothing risks closing US market. This is leverage to get balanced auto trade between US and Canada, and charge individual manufacturers fees/tariffs based on imbalance. Demand that manufacturers pay more for Canadian access, with payment in local production. Can be part of new CUSMA/USMCA to permit US to get same balanced trade payments, if Canada were to export more than we import.
EV tariff could have been 25% and they’d sell all 49k quota with more revenue for Canada. There will need to be an investment in service centers and charging. Low tariff may end up with the most expensive Chinese models (ferrari type competition) imported.
I can’t say I’m too surprised. I’m not involved in the auto sector in anyway, but the media I’ve seen about it with respect to Canadian manufacturing has been all negative - US companies or US owned companies pulling their manufacturing out of Canada despite deals made (looking at you Stellantis). If our auto sector is diminishing/pulling out, what do we have to protect?
That being said, I’d like to see more manufacturing jobs here as part of that deal, but I’m entirely uninformed on how that would work or what it would look like.
According to a CBC commentator, Carney hinted that a Chinese EV factory may be in the cards. Apparently that was only in a French interview.
Yeah, my bet was they’d likely go with quota/lower tariff at the first meeting, factory afterwards.
6.1% is actually 0. ie. it is same rate as non USMCA autos. Factory would likely be traded for higher import quota, and charging/service/dealership investments.
It makes sense. Now the question is what’ll it do to CUSMA negotiations with the US?
Hard to say. However the US should be clear now that the economic channel to China is open. The more the US uses the stick on us, the more and faster we’d widen the Chinese channel. Unlike many of the other individual trade partners we have, we already have very large channel with them, and China has the manufacturing capacity to fullfil a potentially rapidly rising demand for goods from Canada as well as capacity to absorb a rise in Canadian exports. So barring an invasion, I think the US might be more careful in the medium term even if they try stick in the short run.
This is the only Canadian act that resulted in Trump saying something positive about Canada. “Good for them. Canada should have made a trade deal with China.”. This is also the only non submissive action Canada has made since the election.
That was his comment? Wow.
Overall this is a good move. However, it will affect manufacturing in Canada. This means North American car manufacturers will simply have to adapt and innovate. Competition is always better than the alternative. For me personally, Honda & Toyota will be my first choice to support our manufacturing base. 🇨🇦💪
Trump can keep his US cars. We don’t need them!
This is a promising start to a reset in the relationship. Let’s see where it goes from here and how it develops. This comes just a couple of months after the US’s NSS that claimed dominance over trade in the Americas, so it’s an important move by Carney. The guard rails Carney discussed seem to be around critical areas that the US would take issue with, like minerals, energy, and AI, but better diplomatic relations between Canada and China along with Canadians getting more exposure to high-quality Chinese vehicles should open more space for the relationship to evolve positively.
It’ll be interesting to see how the EV thing shakes out. Apparently the new vehicles will be priced starting at 33k, which is way less than less subsidized EVs (at least the ones I’ve looked at). AFAICT, there were around 250k EVs sold, so 49k would make a pretty big crater in sales from incumbents.
I’d really like it if we built more here, ideally from a Canadian manufacturer, but that’s looking less likely all the time.
But it’s good news for our other sectors.
I see factories in our future.
Canada will allow up to 49,000 Chinese
In case people want to know want to know what the numbers means. There was 202k battery EV’s registered in 2024 and 82k through 3 reported quarters in 2025.
Imagine this just gets the ball rolling and there will be a more substantial deal before we hit that number. As of now I don’t like the lack of progress security(this extends outside of EV’s or ones from China) and how we didn’t leverage this into any manufacturing deals.
StatCan Source (first time I’ve seen them use PoweBI):
It’s good for increasing overall EVs by increasing charging infrastructure. Will help other EV sales.
They won’t build any assembly here before there is any demand.
Don’t underestimate their desire to build soft power.
There’s been a lot of noise the last few years about there being big demand for these EV’s so we’ll see how true this is. I do have a inclination they’ll do rather well even with the economy and low gas prices.
There are headwinds: EV incentives are being removed, electricity prices are climbing, and there’s the cultural antipathy towards climate action from the US.
Here’s hoping it still works out tho.
I hope so. My province has practically shut down the EV and solar panel incentives and as you say the incoming belt tightening on the economy make this look like it’s getting setup to fail.
Great to see the real numbers, thank you. I agree with the sentiment about manufacturing. If it were me, I would tie expanded levels to local manufacturing, with more favorable rates for non-luxury vehicles.
I’m in one of the big cities affected by this in Ontario. I’ve got mixed feelings, but I think this may end up being for the better. With all the American manufacturers backsliding on their EV transitions and keeping their prices sky-high for whatever they do have—all while refusing to stand up to Trump in any meaningful way—now, they’ll have to compete or risk losing the market entirely. I still think we should do more and accept vehicle standards from other countries in our market, not just the American ones. This should lower vehicle costs and, in turn, insurance rates for affordable vehicles. It should also make it more economical to export products directly to China, rather than the current convoluted process of selling to intermediary countries that add minimal processing before re-exporting to China at a higher cost.
