Canadian Prime Minister Mark Carney announced Friday that the country will reduce its 100% import tax on Chinese-made EVs to just 6.1%, paving the way for companies such as Geely, BYD and Xiaomi to establish a second foothold in the North American auto market.
However, Canada will not fully participate in China’s EV market. Initially, the country will limit annual imports to 49,000 vehicles. That cap will gradually increase to about 70,000 people over about five years, according to the Associated Press.
This is a major shift, especially as the European Union considers lowering its own auto tariffs and China aims to increase exports of electric vehicles. Although the United States remains resistant on this point, President Trump said this week that he is open to Chinese automakers building factories to produce EVs in the United States.
China already exports gasoline, hybrid and electric vehicles to Mexico, with the latter expected to be particularly active in 2025. Many of China’s major EV makers are moving to enter the U.S. market, including Geely, which held a driving event at the Consumer Electronics Show in Las Vegas last week. While the company displayed a number of models ostensibly aimed at the Mexican market, one public relations executive hinted that the conglomerate is aiming to announce an entry into the United States within the next two to three years.
Automotive journalists, influencers, and even some executives (notably Ford CEO Jim Farley) have praised the quality of Chinese EVs in recent years.
However, due to 100% tariffs on Chinese cars, the idea of exporting cars to the US has so far not materialized. That’s despite the fact that Chinese EVs sell for much less than the average car in the United States. This is a feat typically accomplished through a combination of extremely low capital costs, labor costs, and a willingness to spend money to gain market share.
China’s ability to undercut other automakers on price is just one concern. In recent years, under Presidents Biden and Trump, the United States has sought to separate itself from China’s EV supply chain for national security reasons. There are other legal hurdles as well. Last year, the U.S. Department of Commerce’s Bureau of Industry and Security issued regulations restricting the import and sale of certain connected vehicles and related hardware and software associated with China or Russia.
tech crunch event
san francisco
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October 13-15, 2026
Avery Ashe, CEO of the nonprofit Securing America’s Future Energy, on Thursday warned against President Trump’s idea of allowing Chinese automakers to build cars in the United States.
“We’ve seen this strategy backfire in Europe and elsewhere,” he said in a statement. “It could have a devastating impact on the auto industry, have ripple effects across the defense industrial base, and make all Americans less safe.” “We call on the president to remain tough on China and protect American automakers and workers.”
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