The Canadian government has announced retaliatory tariffs on the U.S. after President Donald Trump imposed tariffs on Canadian, Mexican, and Chinese goods. The Canadian tariffs will be levied on $155 billion worth of U.S. goods—including a 25% tariff on American-made electric vehicles, a move that will impact Tesla’s entire lineup in Canada.
On Saturday Trump announced their tariffs, which take effect Tuesday and include a 25% duty on imports from Canada and Mexico and a 10% tariff on Chinese goods. Trump justified the move by claiming that Canada is not doing enough to stop the flow of fentanyl into the United States, stating that the tariffs will remain in place until he is “satisfied” with Canada’s actions on the issue.
In response, Prime Minister Justin Trudeau said Canadian tariffs on $30 billion worth of U.S. goods will also take effect Tuesday, followed by further tariffs on $125 billion worth of U.S. products to give Canadian businesses time to adjust supply chains. Notably, electric vehicles will be included in this second wave of tariffs, significantly affecting the Canadian EV market.
Impact on Canadian Tesla and EV Buyers
Tesla buyers in Canada may see steep price increases on vehicles imported from the U.S., as the Model Y, Model 3, Model S, and Model X all originate from Tesla’s American factories—Fremont and Giga Texas.
These price increases would be on top of the price increases earlier this week of as much as $9,000.
The impact extends beyond Tesla—Ford, General Motors, Lucid, and Rivian, among others, will also be affected, as any EV imported from the U.S. will be subject to the 25% tariff, which will likely result in major price increases.
Canada Already Imposes a 100% Tariff on Chinese EVs
These tariffs come soon after Canada imposed a 100% tariff on Chinese-made EVs, which took effect on October 1, 2024. This policy was designed to protect North American automakers from a flood of lower-cost Chinese electric vehicles that have been disrupting global markets.
For Tesla, which had been importing vehicles from Giga Shanghai into Canada, the company had to switch back to supplying Canada with U.S. made cars. Now, Tesla has no options to avoid the tariffs, as shifting to supply cars from Giga Berlin is unlikely as that factory only builds the Model Y.
For Canadian consumers, these combined policies could make affordable EV options even harder to find. With Chinese EVs already effectively banned due to tariffs, and now U.S.-made Teslas and other American EVs facing steep price hikes, along with the federal iZEV rebate program recently ending, the options for buying an electric vehicle at a reasonable price in Canada will likely be shrinking. Eye soon.
Meanwhile, automakers with operations in Canada, like Stellantis (Windsor-built Chrysler Pacifica Hybrid) and General Motors (Ingersoll-built BrightDrop EVs) could benefit from the tariffs, as their vehicles would remain tariff-free and become more attractive to Canadian buyers.
