The federal government has formally repealed its 100% tariff on Chinese battery electric vehicles, reversing a policy introduced just two years ago and granting Chinese automakers expanded access to the Canadian market.Blacklock's Reporter says a cabinet notice confirmed the surtax was eliminated retroactive to March 1, following a pledge by Prime Minister Mark Carney during a Jan. 15 visit to Beijing.Cabinet said the tariff had become a point of friction with China and was undermining broader trade relations between the two countries.“The surtax became a source of concern for China and an important irritant in the bilateral trade relationship,” cabinet wrote in the legal notice.Under the revised policy, Chinese manufacturers will be allowed to export up to 49,000 electric vehicles to Canada this year at reduced tariff levels — roughly half of Canada’s battery electric vehicle market. The quota will increase by 6.5% each year, according to a Regulatory Impact Analysis Statement from the Department of Industry.Federal officials said the policy change could encourage Chinese automakers to partner with Canadian companies and establish manufacturing operations in Canada, though the notice offered no specifics on where those jobs might appear or how many positions could be created.“It is expected this measure will catalyze new Chinese joint venture investment in Canada with trusted partners to protect and create new auto manufacturing jobs for Canadian workers and ensure a robust build-out of Canada’s electric vehicle supply chain,” the department wrote..The government also said half of the import quota will eventually be reserved for lower-priced vehicles. By 2030, 50% of Chinese electric cars allowed into Canada must have an import price of $35,000 or less, a measure officials said would increase the availability of affordable electric vehicles.Ottawa originally imposed the 100% tariff in 2024, accusing Chinese automakers of flooding global markets with heavily subsidized vehicles and threatening domestic manufacturing.At the time, then-finance minister Chrystia Freeland warned that China’s industrial policy was aimed at undermining Western competitors.“Workers and the auto sector currently face unfair competition from China,” Freeland said when the tariff was introduced.“The reality is China has an intentional, state-directed policy of over-capacity and over-supply designed to cripple our own industry,” she added. “We simply will not allow that to happen to our electric vehicle sector which is showing such promise and in which we have spent.”Carney announced the policy reversal during a speech to the Canada-China Business Council in Beijing, praising China’s rapid development in electric vehicle manufacturing..“China’s strengths, for example in electric vehicles, are formidable,” he said.“They are undeniable. These are the most affordable and energy efficient and innovative vehicles in the world.”“We need to learn from, partner with and access and build supply chains with China,” Carney added.China in turn agreed to temporarily lower its own tariffs on Canadian canola, which had reached as high as 75.8% on some shipments.
