A Canadian candidate for Prime Minister has proposed a 100% tariff on Tesla vehicles in response to new U.S. trade restrictions. This move comes as a reaction to U.S. President Donald Trump’s 25% tariff on Canadian goods, excluding energy, which is taxed at 10%.
While some see targeting Tesla as justified, others argue it is unfair. A counterproposal is gaining traction: Instead of banning Tesla, Canada should remove its own 100% tariff on Chinese EVs to increase competition and put pressure on U.S. automakers.
Why Is Tesla Being Targeted?
Chrystia Freeland, a leading candidate for Canada’s Liberal Party leadership, believes a Tesla-specific tariff would directly impact American stakeholders who influence the White House.
“We are going to go after American stakeholders who matter to the White House.”
Her goal? To encourage other affected countries to join Canada in targeting Trump’s core business interests.
This proposal has divided public opinion. Critics argue that Tesla is being unfairly singled out, while supporters say Elon Musk’s support of Trump makes it a fair response.
An Alternative: Open Canada to Chinese EVs
Last year, Canada implemented a 100% tariff on Chinese EVs, following the U.S.’s lead to protect American automakers. Now, some argue that lifting this tariff would benefit Canadian consumers by allowing more affordable EVs into the market.
What Would This Change Do?
- More competition: Chinese automakers like BYD, Nio, and XPeng could expand in Canada.
- Lower EV prices: More choices at competitive prices would accelerate EV adoption.
- Pressure on U.S. automakers: If Chinese EVs gain market share, American companies may push the U.S. government to ease trade restrictions.
Tesla, which produces EVs in China, could also benefit. However, its damaged reputation in Canada and growing competition from Chinese brands may limit its advantage.
What’s Next?
If Canada keeps Tesla-specific tariffs, it risks backlash from EV consumers and automakers. If it opens the market to Chinese EVs, it could increase competition and weaken Trump’s trade strategy.
With Canada’s EV industry at a crossroads, the real question is whether trade policy should be used to punish one company—or to reshape the entire market.
