China EV tariff deal raises long-term questions for Windsor auto sector
A new federal agreement allowing a limited number of Chinese-made electric vehicles into Canada is being viewed as a modest short-term shift, but one that raises longer-term concerns for Windsor’s auto industry and manufacturing jobs.
Under the deal, Canada will permit up to 49,000 Chinese electric vehicles per year to enter the country at reduced tariffs. In exchange, China will ease restrictions on Canadian agricultural exports, including canola, peas, and seafood.
Short-term impact seen as limited
Greg Layson, digital and mobile editor at Automotive News Canada, said the immediate impact on Windsor’s manufacturing base is likely minimal.
He described the agreement as a cautious step rather than a major policy shift. Layson said the quota limits the scale of Chinese EV entry and does not represent a sudden surge in imports.
“If you allowed 49,000 EVs into Canada last year, that would have been about 2.5 per cent of all vehicle sales,” Layson said, adding that the number is more significant within the EV segment but remains small overall.
Different market segment than Windsor production
Layson noted that Chinese EVs would largely serve a different market segment than vehicles currently built in Windsor.
Windsor produces a high-performance electric muscle car under the Dodge brand, owned by Stellantis. Layson said that niche, high-margin production is not directly threatened by lower-cost Chinese imports.
He also said Windsor’s emerging battery manufacturing sector is unlikely to face immediate pressure under the current quota.
Long-term risks remain
While short-term impacts appear limited, Layson warned that the implications could change if import volumes increase significantly in future years.
He said concerns would grow if Canada began importing hundreds of thousands of Chinese EVs annually or if Chinese automakers established production facilities in Ontario.
Layson also raised questions about employment levels at any future Chinese-owned plants, citing the industry’s heavy reliance on automation and robotics.
Consumer benefits and security concerns
From a consumer standpoint, Layson said the deal could help make EV ownership more accessible. He noted that Chinese EVs are expected to be priced around $35,000, undercutting most competitors in Canada.
However, he also pointed to cybersecurity concerns, noting past federal restrictions on Chinese technology over national security issues.
Union warns of job losses and trade imbalance
Unifor Local 444 President James Stewart said the agreement places added strain on an auto industry already under pressure, particularly in Windsor.
Stewart said the quota is expected to increase annually, while China’s agricultural concessions are temporary. He warned that the deal could worsen Canada’s trade position within North America.
He also questioned whether opening the market to lower-cost vehicles would attract new investment, arguing it could instead drive manufacturing elsewhere.
Stewart said the agreement could complicate future trade negotiations with the United States under CUSMA and lead to long-term job losses.
Uncertainty ahead
The federal government has framed the agreement as a balanced trade measure, but industry experts and labour leaders remain divided over its long-term effects.
While consumers may benefit from more affordable EV options, questions remain about manufacturing competitiveness, employment, and Canada’s alignment with key trading partners.
For Windsor’s auto sector, the impact may not be immediate, but many say the real test will come if the door opened by this deal continues to widen.
