Canada’s recent trade cope with China is getting a mixed response in Washington, with U.S. President Donald Trump voicing support as administration officials warned Ottawa could regret allowing Chinese EVs into the Canadian market.
The deal signed with Beijing on Friday reverses course on 100 per cent tariffs Canada slapped on Chinese electric vehicles in 2024, which aligned with similar U.S. duties. Canada and China also agreed to scale back tariffs on canola and other products.
Asked in regards to the deal by reporters on the White House, Trump said Prime Minister Mark Carney was doing the proper thing.
“That’s what he needs to be doing. It’s a great thing for him to sign a trade deal. If you happen to can get a cope with China, you must try this,” Trump said.
Nonetheless, members of Trump’s cabinet expressed concern.
“I believe they’ll look back at this decision and surely regret it to bring Chinese cars into their market,” U.S. Transportation Secretary Sean Duffy said at an event with other U.S. government officials at a Ford factory in Ohio to tout efforts to make vehicles more cost-effective.
U.S. Trade Representative Jamieson Greer told reporters the limited variety of vehicles wouldn’t impact American automotive firms exporting cars to Canada.
“I don’t expect that to disrupt American supply into Canada,” he said.
“Canada is so depending on the USA for his or her GDP. Their entire population is crowded around our border for that reason. I’ll let you know one thing: if those cars are coming into Canada, they’re not coming here. That’s needless to say.”
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Carney has said it’s essential for Canada to enhance trade ties and cooperation with China in light of Trump’s trade war and threats to let the Canada-U.S.-Mexico Agreement on free trade expire.
The trade pact is up for review this summer, and Greer reiterated that the Trump administration desires to bring more auto manufacturing back to the U.S. and incentivize firms to achieve this.
Under the brand new cope with Beijing, Carney said he expects China will lower tariffs on its canola seed by March 1 to a combined rate of about 15 per cent.
Greer questioned that agreement in a separate CNBC interview.
“I believe in the long term, they’re not going to love having made that deal,” he said.
He called the choice to permit Chinese EVs into Canada “problematic” and added: “There’s a reason why we don’t sell numerous Chinese cars in the USA. It’s because we have now tariffs to guard American auto employees and Americans from those vehicles.”
Greer said rules adopted last January on vehicles which are connected to the web and navigation systems are a big impediment to Chinese vehicles within the U.S. market.
“I believe it might be hard for them to operate here,” Greer said. “There are rules and regulations in place in America in regards to the cybersecurity of our vehicles and the systems that go into those, so I believe it could be hard for the Chinese to comply with those type of rules.”
Trump and officials like Greer have taken aim at Chinese attempts to enter the North American automotive market through Mexico by bypassing rules of origin under CUSMA.
The CUSMA review set for July is anticipated to handle those loopholes that American and Canadian officials have said are being exploited by China.
Those concerns, which were also raised by the Biden administration, partly helped spur the steep tariffs on Chinese EVs, that are heavily subsidized by Beijing.
Trump, nevertheless, has also said he would love Chinese automakers to come back to the USA to construct vehicles.
Each Democrat and Republican lawmakers within the U.S. have expressed strong opposition to Chinese vehicles as major U.S. automakers warn China poses a threat to the U.S. auto sector.
Ohio Senator Bernie Moreno, a Republican, said at Friday’s event on the Ford plant that he was against Chinese vehicles coming into the USA, and drew applause from the opposite government officials.
“So long as I even have air in my body, there is not going to be Chinese vehicles sold the USA of America — period,” Moreno said.
—with files from Reuters
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