Canada Likely to Take Chinese EV Production as Offset to Lost U.S. Trade
As previously outlined, Canada is so entrenched with their ‘orange man bad’ syndrome, they just cannot get out of their own way on stupid trade decisions. {GO DEEP}
You might remember Mexico retreating from Chinese electric vehicle (EV) development following the November 2024 election of Donald Trump.
China was on the cusp of investing $5 to $7 billion in new EV manufacturing in Mexico, when President Trump announced he would impose massive tariffs to block any import of Chinese EVs made in Mexico. Trump won the election and together China and Mexico scrapped their plan.
Europe then stepped on the Chinese EV rake and began purchasing carbon credits from Chinese EV companies to avoid the “climate change” auto goals and subsequent fines to EU car companies for not hitting EV production targets. In essence, Europe is paying Chinese EV companies for carbon credits, thereby subsidizing lower priced Chinese EVs in Europe. The EU is paying China to destroy their own auto industry.
Now, it’s Canada’s turn.
As a result of President Trump asserting tariffs against imported autos, the large auto companies are abandoning plans to build or expand auto manufacturing in Canada. The Canadians are angry, and the professional political class in Canada is doing everything they can to continue ramping up opposition to Donald Trump.
With increased tariffs against Canada, and with the likely dissolution of the USMCA (CUSMA) coming in the near future, the Canadian govt of Mark Carney has been traveling the world to find alternative markets for their goods and services. The main targets for new Canadian economic and trade relations are the U.K, EU and China.
In a deal to expand the trade relationship with China, the Canadian government of Mark Carney is now proposing to drop tariffs against Chinese EVs in a deal to sell more pork and canola oil. That’s correct, in essence Canada will take the EV auto business abandoned by Mexico.
This was Canadian Prime Minister Mark Carney’s grand plan as he attended the ASEAN summit in Malaysia.
Keep in mind, as we have outlined all along during Trump’s trade reset, the USMCA is going to be abandoned in favor of two bilateral free trade agreements; one with Mexico and one with Canada.
As outlined in the Mexican decision to cancel EV investment, Mexico is aligning for a favorable trade relationship with President Trump and the USA.
The Mexican govt can see the benefits and accepts their regional dependency to the world’s largest consumer market. However, Canada is doing exactly the opposite and increasing the disconnect between Canada and the United States on key sectors of trade and commerce.
Canada may benefit in the short term from sales of pork and canola to Beijing, while simultaneously gaining Chinese investment in cobalt mining and auto development for EVs. But those EVs will never be permitted to cross the border into the USA and any effort to enhance Chinese EV sales in Canada will only disconnect them more from trade with Donald Trump and the USA.
[BACKGROUND HERE] – [Canada/Chinese EV Deal Here]
Post a Comment