Chinese electric-vehicle makers such as BYD (BYDDY), XPeng (XPEV), and Nio (NIO) may be gearing up for a boost. On Friday, Canada and China reset their diplomatic ties, agreeing to an early tariff cut on electric vehicles.
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Mark Carney, Canada’s prime minister, on Friday said his administration will impose a 6.1% tariff on EVs from China, allowing up to 49,000 units into the North American country. This marks a dramatic turnaround from the 100% tariffs imposed on the Asian giant by Justin Trudeau, Canada’s former prime minister, in 2024.
The arrangement suggests that Canada — which counts the U.S. as its largest trading partner, followed by China — may be seeking other strategic alignments, even as diplomatic relations with Washington have taken a hit recently. In May 2024, the U.S., under former President Joe Biden, imposed a 100% tariff on Chinese EV imports, with the duty coming into effect that same year.