If you’re scratching your head about why “Canada just made an EV deal with China,” you’re not alone.

Last week, Prime Minister Mark Carney announced a landmark trade agreement with China that reduces tariffs on Chinese electric vehicles from a near-ban to a quota system with a much lower duty — allowing roughly 49,000 Chinese EVs annually at a 6.1 % tariff instead of the previous 100 % barrier.

In return, China is cutting devastating tariffs on Canadian farm exports like canola and other goods. 

To product makers, this means something deeper than politics and big economics.

In North America, we disregard how China has actually built an EV ecosystem: scale, design talent, volume, plus price competitiveness worlds ahead of Western producers.

It’s not only subsidies (which are real), but industrial strategy that created massive domestic demand and iterative refinement of technology, manufacturing, and customer expectations.

That’s ONE reason China produced more than a third of the world’s EVs last year. Over here, we’ve got our heads stuck deep in the sand, which is worrisome.

Canada and the U.S. have struggled embarrassingly to foster competitive EV platforms that balance technology, cost, and adoption.

Protectionism does defend existing players, but it also isolates them from real-world competitive pressure that accelerates innovation while it lowers prices.

So, what happens? Consumers pay more, adopt slower, and see fewer choices. It stunts all our growth, as we shout into our echo chambers that EV tech isn’t really feasible … and the environment falls victim.

This tariff shift reminds us that shielding local products from competition is not the same as improving them.

Lower-cost imports and high-quality domestic products can co-exist, and history shows markets evolve fastest when competition drives better design, tighter engineering, and more affordable value.

Tesla – important and ambitious – occupies the premium lane. But if legacy and startup brands in North America hope to compete at volume, they need to match rate of improvement, not just production costs.

China’s automakers are already setting a blistering pace with world-class design leadership and shrinking price gaps.

That reality isn’t a tariff away; it’s a capability to build. 

The takeaway I’m getting at for product makers: Don’t think tariffs are a substitute for innovation. 

Protective trade policy delays competition, but it doesn’t make products better or more desirable. If anything, the opposite happens.

The brands that thrive in the long run lean into competitive forces: adopting what works, improving on it, and creating distinctive value beyond price.

This is a big, important topic. Hit reply and tell me what you think!

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