by Michael Gauthier
- President Trump has threatened Canada with 100% tariffs.
- He’s upset about the country’s preliminary trade deal with China.
- That deal will allow Chinese EVs into Canada with a 6.1% tariff.
After abandoning his tariff threats over Greenland, President Trump has a new target and it’s even closer to home. In fact, it’s a familiar foe as he’s taking aim at Canada once again.
Following a preliminary trade deal between Canada and China, Trump lashed out and said “China will eat Canada alive, completely devour it.” He went on to claim the deal will destroy Canadian businesses and their “general way of life.”
More: The Biggest Winner In Canada’s EV Deal With China Could Be An American Brand
While Trump knows plenty about destroying businesses – including many of his own – he threatened Canada with 100 percent tariffs if they go through with their Chinese trade deal. He also said if Prime Minister Mark Carney thought he was “going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken.”
Canada Cuts EV Tariffs
Carney responded by saying there are no plans for a free trade agreement with China and the deal seeks to “rectify some issues that developed in the last couple of years.” However, the proposal calls for big changes including cutting the 100 percent tariff on Chinese electric vehicles to just 6.1 percent.
We’re buying Canadian, and we’re building Canadian. pic.twitter.com/JpKhEFKA2P
Canada would also allow up to 49,000 Chinese EVs to be imported annually, but that would eventually increase to around 70,000 units. This is in exchange for reduced Chinese tariffs on Canadian exports of pork, seafood, and canola oil.
The Canadian Vehicle Manufacturers’ Association has spoken out against the move as they said the “action has the potential to undermine Canada’s auto sector and presents risks to the future of the integrated North American auto supply chain.” Of course, it’s worth mentioning the group’s three members are Ford, General Motors, and Stellantis, and they all have a lot to lose from Chinese vehicle imports.
China Eyes Canada for Auto Expansion
While jobs could be on the line, The New York Times reported that Carney said China would make a “considerable investment into Canada’s auto sector” within three years. This seems to suggest some automakers plan to set up shop in the Great White North.
The publication also spoke to a University of Michigan professor who claimed that if Ford and GM continue losing ground to Chinese automakers, they could “gradually become niche manufacturers” that mainly focus on large pickups and SUVs popular with Americans. In effect, American brands would have to concentrate almost exclusively on the US market.
While that seems a little far-fetched at this point, some people are pointing the blame at the Trump administration and their trade war with Canada. With no deal in sight and a contentious USMCA review on the horizon, a handful of observers say Canada was effectively backed into a corner and had to explore other opportunities in the wake of a souring relationship with the United States.
