Canada’s new electric vehicle accord with China is being sold as a climate win and a trade breakthrough, but it also hands Beijing fresh leverage over a critical Western industry. By sharply cutting tariffs on a surge of Chinese-made EVs, Prime Minister Mark Carney is betting that cheaper cars and restored farm exports are worth the geopolitical and industrial risks. I see a deal that could instead deepen Western dependence on Chinese supply chains and fracture North American unity at the very moment democracies are trying to push back.
The bargain looks especially fraught because it is being struck in the shadow of President Donald Trump’s tariff threats and a broader contest over who will dominate the green technologies of the future. If Carney is wrong, the pact will not just reshape Canada’s auto sector, it could undercut Western efforts to build resilient, democratic control over the EV ecosystem.
The EV tariff carve-out that changes the game
At the core of the agreement is a dramatic shift in how Canada treats Chinese electric vehicles at the border. Ottawa is dropping its levy on Chinese EVs from 100% to 6.1% for the first 49,000 vehicles imported each year, a change big enough to transform showroom prices and competitive dynamics. That quota effectively creates a privileged lane for Chinese manufacturers to test and grow their presence in a G7 market while North American rivals are still scaling up their own EV lines like the Chevrolet Equinox EV or Ford F-150 Lightning. For a government that has promised to defend domestic auto jobs, it is a striking concession to producers backed by the industrial might of Beijing.
Carney’s team argues that the tariff relief is part of a broader reset with China that will secure access to critical minerals and diversify Canada’s trade away from an overreliance on the United States. Official communications describe a new strategic partnership in which Canada expects China to lower tariffs on Canadian canola seed to a combined rate of approximately 9 percent by early spring, easing pressure on farmers who were hit when Chinese import taxes effectively shut them out. The logic is that cheaper EVs plus revived agricultural exports will help the middle class and accelerate the energy transition. Yet by tying a core piece of Canada’s industrial strategy to Chinese goodwill, the government is also accepting that Beijing will have a say in how fast and on whose terms that transition unfolds.
Carney’s climate vision meets hard geopolitics
Mark Carney has long cast himself as a global architect of climate finance and orderly transition, from his central banking days to his current role as prime minister. In a recent address at Davos he warned that the multilateral institutions on which middle powers rely, including the WTO and the COP process, are under strain, and framed engagement with major emitters as “classic risk management.” In that worldview, drawing China into a rules-based green trade framework is not a luxury, it is essential to hitting global emissions targets. The EV deal is being presented as a practical expression of that philosophy, using market access to nudge a rival power toward cleaner exports.
The problem is that climate pragmatism collides here with a harsher reality of strategic rivalry. Critics note that exporting commodities such as oil to China gives Canada some leverage, because those flows can be redirected, but importing high value manufactured goods like EVs entrenches dependence on Beijing. Once Chinese brands are embedded in Canadian dealerships and supply chains, any future attempt to tighten standards or reimpose tariffs will be met by domestic consumers and dealers who have grown used to low prices. That is a very different kind of “risk management” from the one Carney outlined in Switzerland, and it raises the question of whether climate goals are being used to justify a strategic concession that will be hard to unwind.
North American blowback and Trump’s tariff threat
The most immediate danger is not abstract geopolitical drift but a trade war with Canada’s closest ally. President Trump has already warned that if Canadian Prime Minister Mark Carney “thinks he is going to make Canada a ‘Drop’ off point” for Chinese EVs into the United States, Washington will respond with punishing tariffs. In a separate social media post, he threatened 100 percent tariffs on Canada if it facilitates Chinese access to the North American market, warning that the move would be “terrible” for the people of Ontario and stressing that Chinese EVs are “heavily” subsidized. Those threats are not idle rhetoric; they signal a willingness to weaponize border taxes against a treaty ally if Trump believes his industrial policy is being undercut.
Within North America, the deal is already straining political ties that Carney once touted as central to Canada’s prosperity. Reporting on the prime minister’s visit to China notes that it signals a potential shift in Canada’s approach to global trade as reliance on the United States becomes less certain and geopolitical tensions reshape relationships. At home, Ontario Premier Doug Ford has blasted the EV pact, saying “so much for the partnership” and warning that it will hurt auto workers in his province, a concern echoed by Premier Doug Ford and the union Unifor. When a policy simultaneously angers the White House, a key provincial leader and organized labour, it is not just a technical trade tweak, it is a strategic gamble with the country’s core alliances.
Domestic industry, Brookfield ties and the China exposure problem
Carney’s defenders argue that Canada cannot afford to sit out the EV price revolution led by Chinese firms, especially when domestic adoption has lagged. An analysis of the pact warns that while cheap Chinese models may boost sales in the short term, they could also undercut investment in local battery plants and assembly lines, ultimately slowing EV adoption in Canada by hollowing out the domestic ecosystem. The same analysis, framed as “Why cheap Chinese EVs may cost Canada more in the long run,” notes that following Prime Minister Mark Carney’s announcement, investors and workers are questioning whether Ottawa is privileging short term consumer gains over long term industrial strategy. If Canadian plants lose scale while Chinese factories ramp up, the country could find itself permanently dependent on imports for a technology that is supposed to anchor its green future.
The perception of risk is sharpened by Carney’s long association with global finance and his ties to firms that have bet heavily on China. A recent post on social media highlighted that, based on recent reports, Brookfield Asset Management’s investments in China exceed $3 billion as of early 2025, including real estate and infrastructure stakes that are not fully detailed in its latest financials. Brookfield’s own Investment Outlook for 2026 describes a “Defining Moment for Global Markets” and suggests that volatility in emerging economies can be an opportunity for disciplined investors. Carney once served as a senior executive at Brookfield, and while there is no evidence of impropriety, the optics of a prime minister deepening economic ties with a country where his former firm has billions at stake are politically combustible. For Western allies already wary of elite entanglement with Chinese capital, this only reinforces the sense that the EV pact is part of a broader pattern of exposure rather than a cleanly strategic choice.
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