Chinese EVs inch closer to the US as Canada slashes tariffs

Canadian Prime Minister Mark Carney announced Friday that his country will slash its 100% import tax on Chinese EVs to just 6.1%, paving the way for companies like Geely, BYD, Xiaomi, and others to establish a second foothold in the North American automotive market.

Canada is not going all-in on Chinese EVs, though. The country will initially cap annual imports at 49,000 vehicles. That cap will slowly increase to about 70,000 in around five years, according to the Associated Press.

It’s a major shift that comes at a time when China is looking to boost EV exports, especially as the European Union weighs lowering its own tariffs on the vehicles. The U.S. remains a holdout on that front, though this week President Trump said he’d be open to Chinese automakers building factories in the U.S. that produce EVs.

China has already been exporting gas, hybrid, and electric vehicles to Mexico, with the latter especially booming in 2025. Many of the leading EV-makers in China have been agitating to enter the U.S. market, including Geely, which held a drive event at the Consumer Electronics Show in Las Vegas last week. While the company was showcasing a number of models ostensibly meant for the Mexican market, one of its communications executives implied the conglomerate is aiming to announce an entry into the U.S. in the next two-to-three years.

Automotive journalists, influencers, and even some executives — most notably Ford CEO Jim Farley — have praised the quality of Chinese EVs over the last few years.

But the 100% tariff on Chinese cars has so far made the idea of exporting them to the U.S. a non-starter. That’s despite the fact that Chinese EVs are sold at far lower prices than the average car in the U.S. — a feat typically achieved through a combination of extremely low cost of capital, labor, and a willingness to burn money to gain market share.

China’s ability to undercut other automakers on price is just one concern. The U.S. has spent the last few years trying to separate itself from China’s EV supply chain for national security reasons, under both Presidents Biden and Trump. There are other legal hurdles too. Last year, the U.S. Department of Commerce’s Bureau of Industry and Security issued a rule restricting the import and sale of certain connected vehicles and related hardware and software linked to China or Russia.

On Thursday, Avery Ash, the CEO of nonprofit Securing America’s Future Energy, cautioned against Trump’s idea of allowing Chinese automakers to build cars in the United States.

“We’ve seen this strategy backfire in Europe and elsewhere—it would have potentially catastrophic impacts on our automotive industry, have ripple effects on our entire defense industrial base, and make every American less secure,” he said in a statement. “We urge the President to stay tough against China and protect American auto manufacturers and workers.”