Canada turns to China for EV partnership amid trade pressure from US

OTTAWA – Prime Minister Mark Carney announced Friday that Canada has agreed to eliminate its 100% tariffs on Chinese electric vehicles in exchange for lower Chinese duties on Canadian agricultural products, marking a sharp break from previous joint trade policy with the United States.

The agreement follows two days of meetings in Beijing. Under the deal, Canada will initially permit the import of 49,000 Chinese electric vehicles (EVs) per year, a quota that will increase to approximately 70,000 over the next five years.

In exchange, China will slash total tariffs on canola, a major Canadian export, from 84% to about 15%.

Carney characterized China as a "more predictable" partner than the United States. The decision reverses a policy from the previous administration that had aligned Canadian tariffs on Chinese goods with those of the U.S.

The Prime Minister emphasized that his government is focused on building an economy that is less dependent on the United States. He cited global trade disruptions, largely driven by President Trump’s tariff policies, as a primary reason for the shift.

The recent trade agreement between Canada and China represents more than a simple commercial pivot; it marks a significant geopolitical fissure within the Western alliance. This realignment is the direct fallout of the Trump administration’s “America First” agenda, which has exerted unprecedented economic pressure on allies and adversaries alike. Prime Minister Carney’s characterization of Beijing as a “more predictable” partner than Washington serves as a scathing indictment of the current volatility defining U.S. trade policy.

For Beijing, the pact is a strategic coup. By successfully exploiting the rift between two of the world’s closest partners, China has effectively undermined the unified front Washington sought to build against the dominance of the Chinese electric vehicle (EV) sector. That Canada—a foundational member of the Five Eyes intelligence community and a core USMCA partner—is breaking ranks suggests that middle powers are increasingly viewing China as a pragmatic counterweight when their national economic interests are threatened by American protectionism.

The deal poses a systemic challenge to the integrated North American automotive industry. The potential influx of low-cost Chinese EVs into the Canadian market will place immediate competitive strain on both U.S. and Canadian manufacturers, likely complicating future USMCA compliance and rules-of-origin negotiations. While Carney maintains that this is a calibrated move, it establishes a significant precedent: U.S. allies are now willing to exercise strategic autonomy and seek alternative architectures when faced with coercive economic measures from Washington.