Source: BYD

Canada is reviewing its 100 % tariff on Chinese electric-vehicles while Beijing expects EV access to relief for Canadian canola exports.

The Government of Canada began a formal review in October 2025 of the 100 % tariff on electric vehicles imported from China, a measure originally introduced in October 2024.

This review comes as officials from Ottawa and Beijing met on October 17 in Beijing to discuss a broader trade dispute involving both EVs and Canadian agricultural exports.

Canada initially imposed the tariff on Chinese EVs citing concerns that manufacturers benefited from state-subsidised production and unfair trade practices. China responded with retaliatory duties in March and August 2025 on Canadian canola-oil, oil-cakes and peas, including a preliminary anti-dumping duty of 75.8 % on Canadian canola seed announced in August.

The October meeting between Foreign Minister Anita Anand and her Chinese counterpart Wang Yi addressed both sides’ concerns. According to the Canadian foreign ministry statement, “issues of respective sensitivity such as agriculture and agri-food products, including canola… as well as electric vehicles” were on the table.

China’s read-out said it is willing to collaborate with Canada to resume dialogue and promote resolution of legitimate concerns.

In Canada, the decision to review the EV tariff has triggered debate among industry and provincial stakeholders. One report noted that exports from Saskatchewan to China dropped 76 % in August compared with a year earlier, coinciding with the imposition of Chinese duties.

Meanwhile the Automotive Parts Manufacturers’ Association cautioned that reducing the EV tariff could open Canada’s market to low-cost Chinese EVs that may be heavily subsidized.

The tariff has also had broader implications for Canada’s auto supply chain. Canada, by aligning its measure with that of the United States, aimed to mirror Washington’s stance regarding Chinese green-technology imports. But now, Ottawa’s reconsideration signals a possible divergence from the U.S. approach and a recalibration of trade strategy in the auto sector.

Analysts say that if Canada eases the tariff, Chinese automakers could gain access to the Canadian market, potentially disrupting domestic manufacturing and altering North American EV competition. At the same time, Canada stands to reclaim billions of dollars in agricultural exports: in 2024 roughly C$5 billion (c. US$3.6 billion) of canola exports were at risk after Beijing’s acceleration of duties.

Provincial governments in the Prairies, where canola production is concentrated, have urged Ottawa to resolve the situation. They argue that China’s effective closure of the Canadian canola market threatens one of Canada’s largest agricultural export sectors.

The review process is ongoing and no decision has been announced. However, Canada’s foreign minister indicated that “regular and candid communication is essential to build trust, enhance cooperation and address respective concerns.”