On January 16, 2026, during his visit to China, Canadian Prime Minister Carney announced that an annual tariff quota of 49,000 vehicles will be implemented on China's electric vehicles, and the tariff within the quota will be adjusted from 100% surcharge +6.1% MFN tariff to only 6.1% MFN tariff, and plans to gradually increase the quota to 70,000 vehicles/year within five years]. The following are the core points and impacts:

1. Core policy content

Quota setting: 49,000 vehicles/year in the first year and increase to 70,000 vehicles/year in five years.

Tax rate adjustment: A 6.1% MFN rate will be levied within the quota, and a 100% surcharge will no longer be imposed, returning to the level before the trade friction.

Scope of application: Information such as registered car companies in China (including joint ventures) and their authorized Canadian importers/dealers, customs verification of origin and other information.

Background: Starting from October 2024, Canada will impose a 100% surcharge on China's electric vehicles. This is a major policy shift.

2. Impact on all parties

China car companies: Good for exports. In 2023, China will export 41,700 electric vehicles to Canada. The quota is slightly higher than this scale. Tesla's Shanghai factory and others will benefit.

Canadian market: Reduce people's car purchase costs, promote China investment into the Canadian automobile industry, and support the net-zero emission goal.

Bilateral trade: release positive signals and create conditions for solving problems in steel, aluminum, rapeseed and other fields.

III. Supplementary information

The quota size is based on the export level before the trade friction, accounting for less than 3% of Canada's new car market, taking into account the export of Chinese companies and the affordability of local industries.

Canada expects to reduce the price of more than half of its imported vehicles to less than $35,000 within five years, providing more affordable options.

Source: Xiong Yu, digital automobile export

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