Canada urged to rethink Chinese EV import taxes

Canada could defuse its trade conflict with China and restore billions of dollars in farm exports by scaling back tariffs on Chinese electric vehicles, an expert has said.

Jiang Wenran, president of the Canada-China Energy and Environment Forum, said the tariffs on Chinese EVs were initiated by Canada — widely viewed as Ottawa aligning with policies of former U.S. president Joe Biden's administration despite there being "no clear rationale" for them.

With Canada imposing a 100 percent tariff on Chinese EVs in October, China hit back in March with 100 percent duties on Canadian canola oil, oilseed and pea imports and a 25 percent tariff on aquaculture products and pork.

"China's countermeasures targeted Canadian agri-food and seafood sectors, but Canada's EV tariffs lack clear rationale," Jiang said. "Western Canadian farmers and fishery industries — key voters in swing provinces like Alberta — are bearing the economic brunt."

Renegotiating EV tariffs with Beijing could alleviate the pressure on western Canada, he said. The move could also strengthen Canada's leverage in trade talks with the United States, countering its unilateralism with China's market potential, he added.

The Canadian Federation of Agriculture has also urged the government to do everything in its power to resolve its trade dispute with China.

In a statement released by the federation on March 10, its President Keith Currie said the Chinese tariffs "could not have come at a worse time" as Canadian producers already combat "unfair and unjustified" U.S. trade actions.

"We urge the government of Canada to engage in immediate and robust diplomatic efforts with China to address these tariffs."

Jiang said a potential EV tariff rollback could incentivize China to reciprocate by lifting retaliatory tariffs on Canadian pork, canola and seafood exports.

He outlined several models. "Post-negotiation options include full mutual tariff removal, proportional tariff reductions to de-escalate tensions, sector-specific managed trade, where China agrees to EV import quotas while Canada grants market access improvements for canola, pork and seafood."

For farmers in Alberta, Saskatchewan and Manitoba provinces, freeing up market access would be immediate, Jiang said.

"Western Canadian farmers, who export over $5 billion annually in canola alone to China, would regain stable market access.

"Resolving this dispute would stabilize rural economies, alleviate growing regional alienation in provinces like Alberta, and weaken political momentum for separatist movements."

Existential risks

The U.S. imposing auto tariffs on Canada to undermine the stability of the U.S.-Mexico-Canada Agreement highlights the existential risks of Canada's overdependence on the U.S., he said. In contrast, China, Canada's second-largest trading partner, provides a balancing counterweight.

Canada's current reliance on U.S.-controlled supply chains leaves it vulnerable, and Canada lacks a mature EV industry, he said.

"Instead of blocking Chinese EVs, Ottawa should focus on strategic partnerships. China's EV and battery technology leadership, combined with Canada's lithium-rich mining sector and adaptable auto workforce, offers synergies."

On consumers' EV uptake, Jiang said keeping Chinese models out would slow down progress.

"Excluding Chinese EVs deprives Canadians of affordable, high-quality options, slowing market penetration and hindering Canada's 2030 EV adoption targets."

There is also potential for deeper collaboration, Jiang said.

He acknowledged geopolitical sensitivities, but said the move would align Canada with broader Western efforts.

"While the EU is already renegotiating EV tariffs with China, Canada's smaller EV sector reduces risks of U.S. pushback. A China-Canada EV pact would complement — not conflict with — trans-Atlantic ties, given Europe's parallel negotiations."