Ontario Premier Doug Ford, as is his wont, is portraying the deal negotiated by Prime Minister Mark Carney with China as disastrous for Ontario, Canada, and the universe as a whole.
Along with various union leaders in the automotive industry, Ford has been broadcasting histrionic warnings about Mr Carney's deal to anyone who will listen. The agreement allows the first 49,000 cheap Chinese electric vehicles (EVs) each year into Canada at a much reduced 6.1% tarriff (down from 100%), in return for much reduced Chinese tariffs on our exports of canola (15%, down from 84%), and the removal of other tariffs on Chinese imports of our canola meal, lobsters, crabs and peas.
Many analysts see this as a good deal for Canada - as good a deal as we are ever likely to get with an economic behemoth like China - and politicians in the Prairies (where the canola comes from) and in BC and the Maritimes (where the seafood comes from) see it as very good. Many Canadian car dealers too welcome the move, as do many consumer groups who see a chance for Canadians to get high quality electric vehicles at an affordable price.
But Ford is fixated on the automotive implications, and specifically the Ontario automotive implications, of the deal, which he sees as all bad. He didn't mince words or hold back in his criticism of the Prime Minister and other premiers, even if his political and economic analysis was predictably naïve. Captain Canada is not big on nuance. He also accuses Mr. Carney of fomenting division between the provinces, something that he himself is guilty of on this and many other occasions.
But does he have a point? Is this "a self-inflicted wound", as one union leader put it? Does it give China "a foot in the door" of our automotive sector, and is that necessarily such a bad thing? Or is this just bull-in-a-china-shop Ford going off half-cocked as per usual?
49,000 EVs is not that many compared to the 264,000 EV (including plug-in hybrid electrics) already being sold in Canada. Compared to the 2 million or so total vehicle sales, it is peanuts (about 2½%). So, it's not really going to have an appreciable overall effect on Canada's car production in the short term, and nothing like the impact of American tariffs on cars in the medium to long term. Certainly, out of China's annual EV production, this hardly registers at all. And it hardly consitutes "flooding" the Canadian market, as Ford claims.
Most of the motor vehicles sold in Canada are imported anyway. Most of them come from the USA (although much fewer than a year or two ago), the rest from Mexico, Japan, South Korea, Germany, and yes, China. (We were importing over 9,000 cars a year from China before we applied the 100% tariff at America's behest in late 2024). Only a small percentage - 9-13% - of cars sold in Canada are actually made in Canada. The rest of the cars built in Canada are exported, mainly to the US. Which is kind of ridiculous when you think about it.
There's also the expectation, baked into the deal, of future Chinese investment in Canadian-built EVs in the future, something Ford himself has been calling for. And it might just rejuvenate flagging EV sales in Canada since the government grant sweeteners were withdrawn, not in itself a bad thing.
But are they safe? Ford suggests not (although without evidence). In fact, several Chinese EVs were among the safest last year, according to the European New Car Assessment Program.
Mr. Ford's other contention is that Chinese EVs would be "spy cars". As he puts it, in his usual man-on-the-street demotic: "I don't trust what the Chinese put in these cars". I'm not sure exactly what Ford thinks they will be able to do, but any Chinese cars imported will have to be authorized and certified by Transport Canada first. Until that happens, imported Chinese-built EVs will probably be limited to brands like Tesla and Polestar, which we already have. Chinese brands like BYD, Geely, Xiaomi, NIO and XPeng will follow later when authorized.
He also says he is convinced that any Chinese-made cars would not be allowed over the Canada-US border, although it's not clear on what basis he believes that. (Although no Chinese brands are sold in the US, over 100,000 Chinese-built cars from brands like Volvo, Buick, Lincoln and Tesla are imported from China to the US each year.)
Of course, how the Trump administration will react to the Canada-China deal, given that they expect everyone to follow their lead on Chinese tariffs (as we did over a year ago), is anyone's guess. Thus far, Trump himself has been suspiciously positive, saying, "That's what he should be doing ... If you can get a deal with China, you should do that, right?", and referring to the deal as a "good thing", even if his Trade Representative Jamieson Greer called it "problematic for Canada", and Transport Secretary Sean Duffy warned onimously "I think they'll look back at this decision and surely regret it", the kind of veiled threat that the US routinely deals in these days.
The Canadian movento strike a deal with China was apparently shared in advance with the Americans, including Greer, so no-one was taken by surprise.
This being the year we have to review/renegotiate the Canada United States Mexico Agreement (CUSMA), the stakes are particularly high. But given that we can no longer rely on the USA as being a sensible and reliable trade partner, what choice did Canada have but to look elsewhere? I don't relish dealing with China any more than the next guy, but what's a country to do? Least-worst option? Rock and a hard place?
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