A proposal to impose a 100% tariff on Tesla vehicles has sparked debate in Canada, as the country considers its response to new U.S. tariffs on Canadian goods. Some experts and industry observers argue that instead of targeting the American EV maker, Canada should ease restrictions on Chinese electric vehicles (EVs) to maintain competition and consumer choice.
Chrystia Freeland, Canada’s former deputy prime minister and a candidate to lead the ruling Liberal Party, has called for a tariff specifically on Tesla as part of a broader response to the U.S. trade measures announced by President Donald Trump. The U.S. recently imposed a 25% tariff on most Canadian imports, with energy products facing a 10% duty.
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“We are going to go after American stakeholders who matter to the White House,” Freeland said. “I have proposed a 100 percent tariff on all Teslas. I am calling on all the countries that are affected by this tariff to join us, and our retaliation will target specific Trump constituencies.”
The proposal has drawn mixed reactions in Canada. Some critics say it unfairly singles out Tesla, while others see it as a justified response given Elon Musk’s perceived ties to Trump and his policies.
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Instead of imposing tariffs on Tesla, some voices in Canada’s auto industry argue that the country should remove or reduce its existing 100% tariff on Chinese EVs. The measure, introduced last year, was largely seen as aligning with U.S. policy aimed at shielding American automakers from competition.
“Canadian consumers need more EV options, not fewer,” an industry analyst said. “If we’re serious about transitioning to zero-emission transportation, opening the market to Chinese automakers makes more sense than imposing tariffs on Tesla.”
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Canada has limited domestic EV production, and much of it relies on government incentives and exports to the U.S. However, with Washington now imposing a 25% tariff on Canadian-made EVs, the economic rationale for maintaining high tariffs on Chinese imports is being questioned.
Reducing tariffs on Chinese EVs could introduce more affordable options for Canadian consumers and put pressure on U.S. automakers to push back against Trump’s trade policies.
Tesla, which operates a major factory in Shanghai, could theoretically sidestep the proposed Canadian tariffs by exporting vehicles from China instead of the U.S. However, analysts suggest that Tesla’s brand perception in Canada has already suffered due to the ongoing trade tensions.
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Additionally, Tesla would face increased competition from Chinese automakers, which have been gaining market share globally.
As trade tensions escalate, Canada faces a critical choice: retaliate with targeted tariffs or reshape its EV import policies to counter U.S. restrictions while expanding options for Canadian consumers.