In a recent series of remarks, former U.S. President Donald Trump vehemently criticized the trade agreement between Canada and China involving electric vehicles (EVs), describing it as highly detrimental to Canada's economic interests. The criticism was initially disseminated via Truth Social, where Trump characterized the agreement as "systematically destroying" Canada and labeled the pact as "one of the worst deals, of any kind, in history."
Transport Secretary Sean Duffy amplified Trump's remarks by sharing a clip on the social media site X, highlighting the potential consequences of allowing increased Chinese EV imports under preferential tariff terms.
The core element of the Canada-China trade deal entails Canada permitting up to 49,000 electric vehicles manufactured in China to be imported at a relatively low tariff rate of 6.1 percent. This development marks a notable shift in Canada's admission of Chinese EVs into its domestic market under favorable tariff conditions.
Trump's condemnation extended beyond just labeling the agreement as damaging; he asserted that Canadian businesses are relocating to the United States, although he did not provide detailed substantiation or additional context for this claim. Emphasizing his interest in the prosperity of Canada, Trump stated, "I want to see Canada SURVIVE AND THRIVE!" while simultaneously cautioning about the vulnerabilities introduced by the accord.
In a more assertive posture, Trump threatened that should Canada proceed with this arrangement with China, the United States might respond by imposing a 100 percent tariff on all Canadian goods and products imported into the U.S. market. This potential tariff escalation underscores the heightened tensions surrounding North American trade relations amid evolving bilateral engagements with China.
Responding to these developments, Canadian Prime Minister Mark Carney maintained that the agreement adhering to reduced tariffs on Chinese-made EVs aligns fully with the stipulations outlined in the United States-Mexico-Canada Agreement (USMCA). Carney's comments during a Sunday press briefing emphasize the Canadian government's position that the new trade parameters conform with existing North American trade commitments.
The trade deal has prompted criticism not only from U.S. officials like Duffy but also from industry stakeholders. Duffy warned that the decision to facilitate Chinese EV imports could have regrettable consequences for the Canadian auto sector and related industries. Similarly, Jim Farley, Chief Executive Officer of Ford Motor Company, has expressed concerns regarding the influx of Chinese-made electric vehicles into markets affecting North American manufacturers.
This discourse around trade policy, tariffs, and electric vehicle imports reflects broader challenges in balancing domestic industry protections with evolving international trade agreements. Market observers will continue to monitor the situation for further developments in policies, tariffs, and industry responses.