BYD Sues Trump Admin Over Tariffs, Eyes Canada Expansion

Chinese EV maker says U.S. tariffs make it too costly to sell cars in America, as it strikes deal with Canada to allow thousands of vehicles.

Published on Feb. 25, 2026

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Chinese electric vehicle manufacturer BYD is suing the Trump administration over stiff tariffs that the company says make it too costly to sell its cars in the United States. The lawsuit claims Trump exceeded his legal authority when he enacted "substantial tariffs" on imports. Meanwhile, BYD has struck a deal with Canada to allow up to 49,000 Chinese-made EVs into the North American country with a 6.1% tariff rate.

Why it matters

This case highlights the ongoing trade tensions between the U.S. and China, as well as the challenges facing foreign automakers trying to break into the lucrative American EV market. It also raises questions about the impact of tariffs on consumer choice and the ability of domestic manufacturers to compete with lower-cost Chinese imports.

The details

BYD, the world's largest EV maker, filed a lawsuit on Jan. 26 in the U.S. Court of International Trade in New York, asking the court to declare Trump's tariffs unlawful. The company says the tariffs, which were imposed on goods imported from nearly every foreign country, have made it too costly to sell its cars in the U.S. Meanwhile, BYD has struck a deal with Canada to allow up to 49,000 Chinese-made EVs into the North American country with a 6.1% tariff rate, known as the "most-favored-nation" tariff.

  • BYD filed the lawsuit on January 26, 2026.
  • BYD set a goal to sell 1.3 million EVs outside of China in 2026.

The players

BYD

A Chinese electric vehicle manufacturer that became the world's largest EV maker in 2025. The company's name stands for "Build Your Dreams" and was founded in 1995, headquartered in Shenzhen, China.

Donald Trump

The former President of the United States who imposed a 100% tariff on all Chinese imports, including cars, making it fiscally prohibitive for BYD to sell its vehicles in America.

Mark Carney

The Prime Minister of Canada, who struck a trade deal with China to allow thousands of Chinese-made EVs into the Canadian market.

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What they’re saying

“if Governor Carney thinks he is going to make Canada a 'Drop Off Port' for China to send goods and products into the United States, he is sorely mistaken.”

— Donald Trump (Truth Social)

What’s next

The U.S. Supreme Court is still considering a case that addresses the same question of whether the Trump administration had the legal authority to impose the tariffs that BYD is challenging.

The takeaway

This dispute highlights the ongoing trade tensions between the U.S. and China, as well as the challenges facing foreign automakers trying to break into the lucrative American EV market. It also raises questions about the impact of tariffs on consumer choice and the ability of domestic manufacturers to compete with lower-cost Chinese imports.