Canada's removal of tariffs on Chinese EVs and China's removal of tariffs on Canadian rapeseed oil is a reasonable choice for both sides.
Canada does not have a big domestic EV industry to protect, and the only reason for doing so is to please the United States. But what is the… pic.twitter.com/NmRZSprhoR
— DaiWW (@BeijingDai) April 12, 2025
Canada’s decision to lift tariffs on Chinese electric vehicles (EVs) and China’s removal of tariffs on Canadian rapeseed oil may appear like simple trade negotiations at first glance. But the underlying implications reach far deeper, exposing the fragility of global trade relations and the complexities of political maneuvering.
Canada’s decision to scrap tariffs on Chinese EVs is not as straightforward as it may seem. The original 100% tariff, imposed years ago, was a desperate attempt to shield Canada’s auto industry, which has never been a major player in the EV market. Protecting domestic manufacturers from foreign competition was a primary objective. However, in reality, Canada’s domestic EV production has remained minimal, making the tariff largely symbolic—more about pleasing the United States than benefiting Canadian manufacturers. The removal of this tariff, which was initially designed to benefit American manufacturers, makes perfect sense now, especially as China has significantly advanced in EV technology and production.
By lifting the tariff, Canada is now set to make Chinese electric vehicles far more affordable, with prices as low as $14,600 CAD for the BYD Seagull EV—far below the starting price of $40,000 CAD for most domestic models. This shift is a game-changer for Canadian consumers, who will now have access to more affordable, environmentally friendly vehicles. But this move also aligns with Canada’s ambitious climate goals, encouraging faster adoption of EVs and reducing reliance on fossil fuels. The economic logic is hard to ignore—China, with its expansive EV production, offers Canadian consumers and businesses a clear path to affordable, green technology. However, the underlying political strategy is just as important. Canada has consistently placed itself under U.S. influence in global trade relations, often choosing to align its policies with Washington’s interests. By lifting tariffs now, Canada is signaling its willingness to re-engage with China, something that may become more critical as trade tensions between the U.S. and China continue to grow.
On the other side of the equation, China’s decision to lift its own tariffs on Canadian rapeseed oil further illustrates the intricate balance of trade politics. China had slapped a 100% tariff on Canadian rapeseed oil in retaliation for Canada’s protectionist measures on Chinese EVs. While this move might have seemed like typical tit-for-tat diplomacy at the time, it now represents a step toward mending relations, especially as Canada’s agricultural sector stands to benefit significantly from this tariff removal. Before the tariffs, Canadian rapeseed oil exports to China were valued at over $3 billion annually—an amount that heavily supported Canadian farmers and the broader agricultural economy. The loss of access to such a large market hurt the Canadian economy, particularly at a time when global food supply chains were already strained.
This move by China is not just about restoring trade; it’s about signaling an openness to improved relations with Canada. As both nations struggle with their own internal economic challenges, particularly in the face of a volatile global economic landscape, lifting these tariffs signals a mutual desire to stabilize trade and improve market access.
These developments come at a time when global trade relations are becoming increasingly strained, particularly between the U.S., Canada, and China. The interconnectedness of global trade policies is more evident than ever, and Canada’s decisions to lift tariffs on Chinese EVs and have China lift tariffs on rapeseed oil reflect broader geopolitical shifts. This isn’t just about two countries engaging in a trade deal; it’s a reflection of how global trade policies are being reshaped in response to shifting alliances and growing tensions.
What’s the broader takeaway here? Canada, while lacking a strong domestic EV industry to protect, has smartly recognized the benefit of fostering closer ties with China. Lifting tariffs on Chinese EVs benefits Canadian consumers and advances environmental goals, while the removal of tariffs on rapeseed oil provides Canadian farmers with a much-needed boost. Both nations are signaling that they are willing to move beyond past disputes and focus on economic opportunities that can benefit them both.
However, this delicate balancing act between economic pragmatism and political maneuvering isn’t without its risks. As Canada continues to navigate the delicate web of global trade, it will have to weigh the short-term gains against the long-term political and economic implications. While trade tensions with the U.S. are unlikely to dissipate anytime soon, the adjustments with China might just be the beginning of a new era in Canadian foreign policy.
Sources:
https://www.cbc.ca/news/canada/canada-china-electric-vehicles-1.7486204
https://www.cbc.ca/news/world/china-canada-tariffs-retaliatory-1.7478503