There’s a famous quote from the movie Road House that’s useful for all sorts of situations: “Be nice. Until it’s time to not be nice.” The people of Canada, by and large, are famous the world over for being very nice. But clearly, the current tariff situation in the U.S. has some of them getting ready to not be nice.
And at least one top politician in Canada is prepared to go directly after Tesla as a result.
In an interview with The Canadian Press, the country’s Liberal Party leadership candidate, Chrystia Freeland, suggested 100% tariffs be applied to a number of U.S.-sourced goods in response to President Trump’s threatened tariffs on Canadian and Mexican imports. Freeland said those could include wine, beer and all Teslas, specifically. And yes, this is because of Tesla CEO’s financial and operational support of Trump, Freeland said.
“We need to be very targeted, very surgical, very precise,” Freeland told the news outlet. “We need to look through and say who is supporting Trump and how can we make them pay a price for a tariff attack on Canada.”
Tesla’s EVs sold in Canada are made in the U.S. as well as China. Canadian tariffs would then raise their prices in that country, leading EV buyers to turn to other automakers instead.
Photo by: Tesla
Freeland added: “One of the characteristics of the Trump administration is they like to traffic in uncertainty,” she said. “There are lots of reports about there being internal debates in the U.S. (administration), so let’s use that to our advantage. And let’s put some cards on the table and be very clear that if they hit us, we will hit them back.”
Freeland, Canada’s former finance minister, is running for the Liberal Party leadership spot currently held by Prime Minister Justin Trudeau. Late last year, Freeland resigned from her finance minister post in part over disagreements on how to respond to Trump’s economic threads.
Musk was Trump’s largest financier during the campaign and is now leading his efforts to reduce the U.S. federal government workforce, complete with similar tactics used to do mass layoffs at Twitter, which he purchased and renamed X.
Broadly speaking, Canada has seen quicker EV adoption than the U.S. In the third quarter of 2024, nearly 17% of new cars sold in Canada—about one in six—were all-electric, compared to the 8% the U.S. finished the year at. Quebec in particular has strong incentives that have driven significant EV adoption. Not surprisingly, Tesla is the top-selling EV brand in Canada with the Model Y and Model 3 leading by a wide margin. More recent statistics aren’t available, but in 2023 Tesla sold at least 60,000 of those two models alone in Canada. So while that’s around 10% of what Tesla sells in the U.S. annually, a presumptive price spike from tariffs would certainly hurt Tesla in America’s neighbor to the north.
That situation would also come after Tesla’s first full year of global sales declines, and a time when many buyers and current Tesla owners are fleeing from the brand in response to Musk’s political maneuvering and multiple public controversies.
Trump’s 25% tariff on imports from Canada, China and Mexico are set to begin this weekend. There was little mention of tariffs on Tesla’s fourth-quarter earnings call this week, save for a brief statement by CFO Vaibhav Taneja. “There’s a lot of uncertainty around tariffs,” Taneja said. “Over the years, we’ve tried to localize our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely, will have an impact on our business and profitability.”
And if more countries follow Freeland’s suggestion and decide to penalize Tesla directly over Musk’s ties to Trump, it could make these trade wars all the more personal for the billionaire CEO and the president alike.
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