Chinese electric cars move closer to the US as Canada cuts tariffs

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

However, Canada is not fully involved in Chinese electric vehicles. The country will initially cap annual imports at 49,000 vehicles. That limit will slowly rise to about 70,000 in about five years, according to the Associated Press.

It’s a major shift that comes as China looks to boost electric vehicle exports, especially as the European Union considers lowering its tariffs on vehicles. The United States remains resilient on this front, although President Trump said this week that he would be open to Chinese automakers to build factories in the United States to produce electric vehicles.

China has already exported gas, hybrid and electric vehicles to Mexico, with the latter particularly booming in 2025. Several of China’s leading electric vehicle makers have been rushing to enter the US market, including Geely, which held an auto event at the Consumer Electronics Show in Las Vegas last week. While the company was showcasing a number of models ostensibly intended for the Mexican market, one of its communications executives implied that the group aims to announce its U.S. entry within 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 electric vehicles over the past few years.

But the 100% tariff on Chinese cars has so far made the idea of ​​exporting them to the United States unacceptable. This is despite the fact that Chinese electric cars sell for prices well below those of the average U.S. car — a feat typically achieved through a combination of extremely low cost of capital and labor and a willingness to burn cash to gain market share.

China’s ability to undercut other automakers on price is just one concern. The United States has spent the past few years trying to separate itself from China’s electric vehicle supply chain on national security grounds, under Presidents Biden and Trump. There are other legal hurdles as well. Last year, the US 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 associated with China or Russia.

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

“We have seen this strategy backfire in Europe and elsewhere. It will likely have catastrophic effects on our auto industry, have ripple effects on our entire defense industrial base, and make every American less safe,” he said in a statement. “We urge the president to stay tough on China and protect American automakers and workers.”