Canada’s leader of the Official Opposition, Pierre Poilievre, who is also the leader of the Conservative Party of Canada, has touted a U.S.-focused auto industry strategy amid the country’s China tariff agreement.

A Dollar For Dollar Rule

On Sunday, Bloomberg reported that the leader proposed exemptions for automakers from federal sales tax for vehicles made in Canada, as well as a rule that would enable companies to import vehicles of an equal dollar value from the U.S. or Mexico into the country for every vehicle produced in Canada.

The Canadian leader also said that it was a “dangerous illusion” to think that overseas EVs could replace auto sales to the U.S., the report said. U.S.-made vehicles accounted for over 40% of Canada’s auto sales.

The Conservative Party has also touted an end to subsidies for hybrid vehicles and EVs, as well as a ban on vehicles using Chinese or Russian software.

It’s worth noting that Canada revised its tailpipe emissions strategy recently and revived the subsidies on EVs, offering CA$5,000 on EVs made in Canada and CA$2,500 on Plug-In Hybrids. Both vehicle categories must have a final transaction value not exceed CA$50,000 to qualify.

Canada-China Agreement

In January, the Canadian government announced it had reached an agreement with China that would see over 49,000 Chinese-made EVs being imported into the country at 6.1% tariff, with potential for the number to increase to 70,000 in the future.

Following the deal, EV giant BYD Co. Ltd. (OTC:BYDDF) (OTC:BYDDY) has registered its factories in Shenzhen and Xi’an as potential exporters to Canada, according to filings with Transport Canada.

Trump Administration Criticizes Canada

However, the deal has seen heavy criticism from President Donald Trump, as well as leaders from his administration. Trump had earlier called the agreement “one of the worst deals, of any kind, in history,” also adding that Canada was “destroying itself” following the deal.

The President had also threatened to impose 100% tariffs on Canada if Canada made a deal with China. He warned that any deal would see Canada being “immediately” hit with a “100% Tariff” against all Canadian goods and products coming into the U.S.

Trump’s Transportation Secretary Sean Duffy also criticized the deal, warning that Canada would “live to regret the day” they let the Chinese Communist Party into the country’s auto sector.

A Possible Boost For Tesla Sales In Canada?

Meanwhile, Canada’s agreement with China could also provide a boost for Elon Musk and Tesla Inc. (NASDAQ:TSLA) as the automaker was importing its Model 3 into the Canadian market from its factory in Shanghai. Lower tariffs could translate to better prices for Tesla and an increase in sales.

Another advantage for Tesla could be its already-established local footprint in Canada, as the company has over 39 outlets in the country. A sales boost could do well for the EV giant, which recently also reported an uptick in sales across multiple European markets.

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