Tesla threatened with 100% tariffs in Canada over Musk’s Trump support

Tesla threatened with 100% tariffs in Canada over Musk’s Trump support

Tesla may soon face a significant hurdle in Canada. Chrystia Freeland, a candidate for the leadership of Canada’s Liberal Party, has proposed a 100% tariff on U.S.-made Teslas in response to former President Donald Trump’s latest trade policies, The Canadian Press reported.

Freeland’s comments suggest that the move would be a direct retaliation against Trump’s proposed tariffs on Canadian and Mexican imports—and a deliberate effort to make Trump’s allies, including Tesla CEO Elon Musk, “pay a price.”

Related: Meet Kamiwaza: the RWB Porsche you’ve been dreaming of

A growing target on Tesla

In an interview with The Canadian Press, Freeland emphasized the need for a strategic response to Trump’s tariff policies. “We need to be very targeted, very surgical, very precise,” she said. “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.”

Cars are seen on the assembly line during a tour of the Tesla Giga Texas manufacturing facility ahead of the “Cyber Rodeo” grand opening party on April 7, 2022 in Austin, Texas.

SUZANNE CORDEIRO/Getty Images

Tesla’s Canadian sales depend heavily on vehicles manufactured in the U.S., as well as some imports from China. If Freeland’s proposed tariffs were enacted, the resulting price hikes could push Canadian EV buyers toward other brands. Tesla is currently the best-selling EV brand in Canada, with the Model Y and Model 3 leading the charge, but higher costs could threaten that dominance.

Related: Dodge confirms gas-powered Charger Sixpack coming this summer

Political and economic implications

Freeland’s remarks come at a time of rising tension over Trump’s 25% tariffs on imports from Canada, China, and Mexico, set to take effect Tuesday. A phone call on Monday between President Trump and Mexican President Claudia Sheinbaum led to a one-month pause on the Mexico-targeted tariff after President Sheinbaum agreed to “supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States,” Trump wrote on Truth Social.

Canada’s Prime Minister Justin Trudeau speaks, flanked by Minister of Foreign Affairs Melanie Joly (L) and Minister of Finance and Intergovernmental Affairs Dominic LeBlanc, during a news conference February 1, 2025 on Parliament Hill in Ottawa, Canada.

DAVE CHAN/Getty Images

Canada, meanwhile, shows no signs of negotiating with President Trump. Canadian Prime Minister Justin Trudeau said on Saturday that the government would impose 25% tariffs on a slew of U.S. imports in retaliation to Trump’s actions. Canada’s new tariffs are set to take effect Tuesday, the same day that Trump’s tariff will start on Canadian imports.

Related: 2025 Ford Mustang Mach-E: 5 reasons to love it, 2 reasons to think twice

Tesla braces for impact

As Canada has outpaced the U.S. in EV adoption—nearly 17% of new cars sold in Canada last year were fully electric, compared to just 8% in the U.S.—Tesla’s presence in the Canadian market is substantial. In 2023 alone, the company sold at least 60,000 Model Ys and Model 3s in the country.

FREMONT, CALIFORNIA – OCTOBER 19: In an aerial view, brand new Tesla cars sit in a parking lot at the Tesla factory on October 19, 2022 in Fremont, California. Electric car maker Tesla will report third quarter earnings today after the closing bell. (Photo by Justin Sullivan/Getty Images)

Justin Sullivan/Getty Images

Tesla’s reliance on international supply chains could further complicate the situation. Tesla CFO Vaibhav Taneja acknowledged the risks during the company’s recent fourth-quarter earnings call, stating that “The imposition of tariffs, which is very likely, will have an impact on our business and profitability.”

Related: It’s 2025 – Is Tesla still cool?

Trade war or political retaliation?

Freeland’s proposal to directly penalize Tesla over Musk’s financial and operational support of Trump signals a growing willingness to personalize trade disputes. Musk was the largest financier of Trump’s recent campaign and has played a key role in the former president’s efforts to reduce the U.S. federal workforce. Meanwhile, Tesla has been navigating its first full year of declining global sales, with buyer sentiment shifting towards a growing selection of EVs.

Final thoughts

If Canada follows through on Freeland’s suggestion—and if other nations take similar action—it could escalate tensions between governments, automakers, and political figures. Whether the tariffs materialize or not, Tesla’s future in Canada could hinge on how these trade battles unfold in the coming months.

Related: 2025 BMW X3 is a technological extravaganza

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.