Canada to Lower Tariffs on Chinese Electric Vehicles Under New Trade Agreement With China

The policy shift marks a major reset in Canada–China relations and signals a new approach to electric vehicle trade and agricultural exports.

By: Haitian Prime News|January 16, 2026|Beijing, China

Canada has announced a significant change in its trade policy toward China, confirming that it will reduce tariffs on certain Chinese-made electric vehicles as part of a broader bilateral trade agreement. The announcement was made during Prime Minister Mark Carney’s official visit to Beijing, where he met with Chinese President Xi Jinping and senior government officials.

Under the new framework, Canada will lower its existing 100 percent tariff on imported Chinese electric vehicles to a substantially reduced rate, applied through a controlled annual quota system. The policy is designed to allow a defined number of Chinese electric vehicles to enter the Canadian market each year at the lower tariff, with the quota expected to expand gradually over time.

Canadian officials described the move as an effort to balance affordability, market competition, and climate goals, while maintaining safeguards for domestic manufacturers. The reduced tariffs are expected to lower costs for consumers and increase the availability of electric vehicles at a time when Canada is accelerating its transition away from internal combustion engines.

In exchange, China has agreed to ease tariffs on several Canadian agricultural products, most notably canola, which has faced steep restrictions in recent years. The agreement is expected to restore partial access to the Chinese market for Canadian farmers and exporters, offering relief to a sector that has been heavily impacted by previous trade disputes.

The tariff reduction represents a notable reversal from Canada’s 2024 decision to impose steep duties on Chinese electric vehicles, a move that aligned Ottawa more closely with similar measures adopted by the United States and the European Union. The new agreement signals a more independent trade posture by Canada, aimed at diversifying economic partnerships beyond North America.

The announcement has drawn mixed reactions. Supporters argue the deal strengthens Canada’s economic flexibility and supports climate objectives, while critics warn it could undermine domestic manufacturing and strain relations with key allies. U.S. officials have publicly expressed concern about the decision, citing potential implications for North American supply chains.

Despite the controversy, Canadian officials emphasized that the agreement reflects pragmatic economic engagement and a broader effort to stabilize relations with China after several years of diplomatic and trade tensions.

The deal is expected to be finalized in the coming months, with implementation timelines and enforcement mechanisms to be clarified by both governments.

Sources

Reuters

Associated Press

Government of Canada

The Guardian

International Trade Canada