Canada Reportedly Considering Removing 100% Tariff on Chinese EV Imports — What It Means for Tesla

The federal government in Ottawa is reportedly considering removing its 100% tariff on electric vehicles (EVs) imported from China, a move that could have major implications for Tesla Canada, used Tesla buyers, and the broader EV market.

Originally announced in August 2024 and implemented on October 1, the tariff increased import duties on Chinese-made EVs from 6.1% to 106.1%, effectively cutting off Tesla’s ability to export vehicles from Giga Shanghai to Canada. This issue has been further complicated by similar trade restrictions with the United States.

Policy Reconsideration and Diplomatic Context

The timing of this potential policy change aligns with Prime Minister Mark Carney’s upcoming Asia trip, which includes stops at the ASEAN Leaders’ Summit in Kuala Lumpur and the APEC Summit in Gyeongju, South Korea.

According to a report from The Wire China, the Canadian government is using this diplomatic tour to advance what Carney calls a “strategic relationship with China.”

Pressure from Canada’s Agricultural Sector

One of the strongest drivers behind the reconsideration comes from Canada’s agricultural industry. Leaders from Manitoba and Saskatchewan have urged Ottawa to lift the EV tariff, citing China’s retaliatory tariffs on Canadian canola and pork as a serious trade barrier.

Chinese officials have reportedly indicated that removing Canada’s EV tariff could lead to the lifting of duties on agricultural imports, offering potential economic relief to farmers across Western Canada.

Potential Impact on Tesla and the EV Market

For Tesla Canada, the change could be particularly impactful:

• It would allow Tesla to resume importing the Model 3 from Giga Shanghai, bypassing the 25% tariff currently applied to EVs imported from the U.S.

• Tesla has already managed to avoid these tariffs on the Model Y by importing units from Giga Berlin in Germany.

This shift could help stabilize pricing for both new and used Teslas across Canada — making vehicles like the Tesla Model 3 and Model Y more affordable for consumers.

Opposition from Ontario Premier Doug Ford

Not everyone supports removing the tariff. Ontario Premier Doug Ford has strongly opposed the idea, stating earlier this month there’s “no damn way” Canada should drop it.

Ford argues the tariffs are critical to protecting Ontario’s fast-growing auto and battery manufacturing sector, which has received billions in federal and provincial subsidies and is expected to create thousands of new jobs.

Outlook for Tesla Canada and Used Tesla Buyers

If the 100% tariff is lifted, the Canadian EV landscape could shift dramatically:

• Tesla Canada would gain flexibility in sourcing and pricing.

• Used Tesla buyers could see more affordable inventory, especially for Model 3s built at Giga Shanghai.

Whether or not the tariff is removed, this ongoing policy debate underscores Canada’s balancing act between trade strategy, domestic industry protection, and EV market expansion.

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article source: drivetesla Canada