• Canada will drop 100% tariff on Chinese EVs, starting with 49k annual quota
• Beijing cuts canola-seed tariff from 84% to ~15%, opening C$5bn farm market
• Move distances Ottawa from Washington’s hard-line stance on China EVs

BEIJING, CHINA (TDR) — Prime Minister Mark Carney said Friday Canada will eliminate its 100% tariff on Chinese electric vehicles in exchange for sharply lower Chinese duties on Canadian canola, breaking with U.S. policy and giving Beijing its first major North-American EV market opening since Washington imposed blanket restrictions last year.

Speaking after two days of meetings with Premier Li Qiang and Commerce Minister Wang Wentao, Carney announced an initial annual quota of 49,000 Chinese EVs that can enter Canada at the standard 6% import duty, rising to roughly 70,000 units by 2031. In return, China will cut its total tariff on Canadian canola seed from 84% to about 15%, unlocking a farm-export market worth more than C$5 billion a year.

“This deal puts money in farmers’ pockets and affordable EVs in Canadian driveways while protecting our auto-supply chain,” Carney told reporters at the Canadian Embassy. “It is a balanced, phased approach—one the United States chose not to pursue.”

Quota Grows Over Five Years

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The agreement, initialed late Thursday and set to take effect 1 March, sets annual quota volumes that climb each year:

Shipments above the quota will continue to face the 100% penalty rate; canola oil and meal tariffs remain unchanged at 9%.

Ottawa Diverges From Washington

The concession marks a clear departure from the hard-line stance taken by the Biden administration and now the Trump White House, which maintain 100% tariffs on all Chinese EVs on national-security grounds.

“Our auto sector is not the same as America’s,” said Innovation Minister François-Philippe Champagne. “We have space for managed competition that still lets our assemblers and parts makers scale up.”

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White House press officials responded coolly, saying Washington “respects Canada’s sovereign trade decisions” but has “no plans to revisit” U.S. tariffs on Chinese EVs.

Farm Groups Cheer Canola Breakthrough

Western Canadian farmers, who have struggled with two years of drought-damaged crops and shut-out Chinese demand, welcomed the tariff relief. Canada ships roughly 4.5 million tonnes of canola seed to China annually; the 69-point duty cut could add C$1.1 billion in farm receipts, according to Cermaq Trade Analytics.

“This restores our competitiveness overnight,” said Canola Growers of Canada president Ron Krahn. “With Chinese crushers paying world prices again, we expect to see vessels booked within weeks.”

Domestic Auto Debate Intensifies

Inside Canada, the deal has split industry and labor groups. Ford Canada and GM Canada warn the quota could siphon market share just as they prepare to launch domestic EV lines, while the Unifor union calls the cap “a manageable compromise that preserves jobs.”

Environmental advocates, meanwhile, say cheaper Chinese EVs will accelerate the shift away from gasoline cars. Environmental Defence calculates the 49,000 annual imports could displace 240,000 tonnes of CO₂ by 2030.

Geopolitical Ripples

Beijing hailed the accord as proof that “dialogue, not decoupling, serves mutual interests.” Foreign Ministry spokesman Lin Jian told reporters China is “willing to explore similar arrangements with other like-minded partners,” a statement widely seen as a swipe at Washington.

For Ottawa, the agreement offers leverage in other disputes. Officials privately note that securing canola access removes a key Chinese bargaining chip in ongoing negotiations over critical-minerals permits and lithium investments.

“We just showed you can defend national security and still pick low-hanging export fruit,” said CIGI senior fellow Meredith Lilly. “Washington may not like the optics, but farmers and consumers will.”

Next Steps in Parliament

The Liberal minority government must still table the agreement for 21 sitting-days under the Trade Act. Opposition Conservatives have pledged scrutiny, but with NDP supply-and-confidence support, passage is expected by April.

Shippers, meanwhile, are already preparing: Port of Vancouver has booked 18 additional EV vessel slots for Q3, while grain handlers along the St. Lawrence are upgrading canola-loading infrastructure.

Will Ottawa’s managed-trade gamble give Canada the best of both worlds, or leave it caught between Washington’s security anxieties and Beijing’s geopolitical charm offensive?

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