Canada’s Industry Minister Mélanie Joly met with Chinese automakers BYD and Chery Automobile during Prime Minister Mark Carney’s visit to Beijing last week to strike what he named a “landmark” trade deal with China.
The meetings with both auto giants were disclosed by Bloomberg on Saturday, a day after Canada agreed to allow up to 49,000 Chinese electric vehicles annually at a 6.1% tariff — down from 100%.
Joly, who accompanied the prime minister to meet Chinese President Xi Jinping, also met with Canadian auto parts supplier Magna International during the trip — as the country prepares to unveil an Auto Plan in February.
The new automotive strategy could allow Chinese companies to assemble vehicles in Canada for the first time.
The plan, expected to be unveiled next month, will give preferential market access to companies that build vehicles in the country.
Chinese manufacturers would be permitted to establish local production under restrictions that may include using Canadian software and forming joint ventures with domestic firms, according to a government official who spoke with Bloomberg.
China’s Auto Giants
BYD and Chery rank among China’s largest automakers and have been aggressively expanding overseas as domestic competition intensifies.
BYD, based in Shenzhen, surpassed Tesla last year to become the world’s best seller of fully electric vehicles.
The company delivered 4.6 million vehicles in 2025, up 7.7% from the prior year, meeting a lowered full-year goal it set in September.
Of those, BYD sold 2.3 million fully electric vehicles.
The company led by Wang Chuanfu had intended to break into the Canadian market before then-Prime Minister Justin Trudeau implemented the 100% tariff in 2024, aligning with a similar US measure under Joe Biden.
Outside of China, the company’s biggest market is Brazil, where it accounts for 80% of all EV sales.
Chery Group, based in Wuhu, unveiled sales targets for 2026 earlier this month, setting a group-wide goal of 3.2 million vehicles — a 14% increase from 2025.
The company and its five core brands aim to deliver 3 million vehicles within that figure.
All of Chery‘s major passenger vehicle brands posted stable growth in 2025.
The flagship Chery brand remained the mainstay with annual sales of 1.7 million units.
Jetour recorded 622,590 units, while Exeed sold 120,369 vehicles. The company’s newer brands, iCAR and Luxeed, posted 96,989 and 90,493 units respectively.
Policy Shift
The potential entry of Chinese automakers into Canadian manufacturing marks a significant departure from Ottawa’s previous approach.
Canada imposed 100% tariffs on Chinese-made electric vehicles in 2024, aligning with similar US measures designed to protect domestic industry from what Washington has called unfair state subsidies.
The tariff deal signed Friday allows up to 49,000 Chinese EVs into Canada annually at a 6.1% tariff rate — and included a commitment by Chinese companies to explore major auto investments in Canada, the official said.
Ottawa will review the agreement in three years to ensure those companies are following through.
The new auto strategy would go further by permitting Chinese companies to establish local assembly operations, subject to safeguards intended to protect domestic technology and employment.
Canada can require that any EVs built domestically have a secure technology platform that does not pose security risks, the official said.
US Criticism
The deal drew sharp criticism from US Transportation Secretary Sean Duffy and from the US Trade Representative Jamieson Greer.
Duffy said Canada would regret allowing Chinese EV imports and that those vehicles would not be permitted to enter the United States.
President Donald Trump, however, applauded the agreement. “That’s OK, that’s what he should be doing,” he said Friday. “If you can get a deal with China you should do that.”
In the longer term, Canada wants to export vehicles around the world and not rely on access to the US market, Bloomberg reported citing a government official, who pointed to Canada’s advantage in having free trade agreements with Europe and Asia.
