January 17, 2026 l By Dalena Reporters
Canada has informed the United States government in advance of its intention to roll back punitive import duties on Chinese electric vehicles (EVs), according to a senior government source familiar with U.S.–Canada trade discussions. This development comes amid Canada’s emerging trade agreement with China that will dramatically reduce tariffs on Chinese-made EVs — a policy shift that breaks with Ottawa’s longstanding alignment with U.S. protectionist measures.
The source, speaking on condition of anonymity, confirmed that Canada’s ambassador to Washington communicated details of the government’s planned tariff reduction to U.S. officials, including the U.S. Trade Representative’s office, to avoid blindsiding Washington and signal diplomatic transparency. While the precise timing of the notifications remains unclear, the disclosure highlights Ottawa’s efforts to manage complex trilateral tensions between its domestic economic interests, relations with the United States, and a potentially pivotal trade reset with China.
The move follows a high-profile diplomatic visit by Canadian Prime Minister Mark Carney to Beijing, where Ottawa and Beijing struck a preliminary tariff-quota agreement. Under that deal, Canada will allow up to 49,000 Chinese EVs annually into its market at a most-favoured-nation tariff rate of roughly 6.1 percent, a significant reduction from the 100 percent tariff imposed in 2024 under former Prime Minister Justin Trudeau. In exchange, China is expected to lower combined tariffs on Canadian canola seeds from 84 percent to about 15 percent and suspend anti-discrimination duties on agricultural products including canola meal, peas and seafood exports.
Ottawa’s tariff shift represents a clear policy divergence from the United States which also imposed substantial tariffs on Chinese EVs and underscores Canada’s bid to balance trade priorities with both Western allies and alternative global partners amid evolving global economic pressures. U.S. officials have reportedly expressed concerns about Canadian tariff easing, with some suggesting it could have implications for North American auto supply chains and regional competitive dynamics.
Canada’s advance notification of its Chinese EV tariff plans suggests a deliberate diplomatic strategy to mitigate friction with Washington even as Ottawa pursues an independent trade agenda. The decision reflects Ottawa’s broader objective to address the adverse economic effects stemming from China’s retaliatory duties on Canadian agricultural exports, which have disproportionately impacted prairie-region farmers and exporters.
Domestic reactions to the tariff rollback have been mixed. While farm groups and provincial leaders in the Prairies welcomed the prospect of enhanced access to the Chinese market for Canadian canola and other products, critics including auto industry representatives and Ontario political figures have warned that easing EV tariffs could undercut domestic manufacturing and deepen reliance on foreign-produced vehicles.
Canada’s calculated communication with the United States ahead of the tariff adjustment signals Ottawa’s recognition of the strategic sensitivities inherent in reshaping trade policy among closely aligned allies, even as it adapts to shifting global market and geopolitical realities.