Canada and China: an electric vehicle deal that surprised Trump
Canadian Prime Minister Mark Carney explained the details of a deal on Chinese electric vehicles to US President Donald Trump during the G7 summit in France. The conversation accidentally aired due to a microphone being left on.
Initially, the leaders joked about a watch left behind by French President Emmanuel Macron. Carney noticed: “He left his watch. We have his watch,” to which Trump replied: “Give it to me if he’s gone, give it to me.”
The essence of the deal: an import quota
Although not all of the conversation was audible, Carney explained to Trump that Canada had imposed restrictions on the import of Chinese electric vehicles:
“That’s less than three percent of our market, 49,000 cars… It’s a limit, we set a hard cap… I thought you’d like that,” said Carney. Trump nodded approvingly and replied: “That’s good, I like it.”
After the meeting, Carney added: “He (Trump) liked the structure. We continued the conversation later.” Trump himself commented: “I don’t know why I said I like it, but I can understand it, yes. Would I rather see a limit than no limit? Yes, I would.”
Chinese brands may produce cars in Canada
According to Bloomberg, many members of the Trump administration are sharply opposed to Canada’s new trade agreement with China. In January, Trump stated on social media that China is “taking over” Canada, “once a great nation.” The deal partially lifted Canada’s 100% tariff on Chinese electric vehicles, and China, in response, suspended its tariffs on Canadian agricultural goods.
Carney noted that the agreement “creates an opportunity — an opportunity, not a certainty — that these commercial relations will develop and Chinese investment will come to Canada.” He clarified that he meant “substantial Canadian manufacturing,” not just assembly of car kits.
The Canadian Vehicle Manufacturers’ Association, which represents Ford, General Motors, and Stellantis in Canada, urged the government to cancel the deal over concerns that it could harm the North American automotive industry.
Could the US follow Canada’s example?
Could President Trump be inspired by Canada’s deal with China and do something similar? While this cannot be entirely ruled out, the US has a much larger automotive industry than Canada, making the threat from Chinese companies significantly more serious, and this seems unlikely.
Critics also point to data security and connected vehicle technology issues in Chinese electric cars. These same concerns prompted two Democrats from Michigan in May to introduce a bill that would ban Chinese cars in the US on national security grounds.
This situation demonstrates the complex balance between trade interests, national security, and economic cooperation. Canada is attempting to find a middle ground by allowing limited access to Chinese electric vehicles while simultaneously stimulating its own production. Trump’s reaction suggests that even opponents of the Chinese auto industry can recognize the pragmatism of such an approach, although in the US, due to the scale of the industry, a similar deal is unlikely to be implemented anytime soon.