Trump’s tariffs force Canada to ally with China on EVs – Jalopnik

What was unfathomable a few years ago has actually happened. After firing a factory worker at Ford’s Dearborn truck plant this week, Trump addressed the media about negotiations to replace the USMCA (United States-Mexico-Canada Agreement), which he implemented during his first term. During that press conference Trump said“We don’t need a Canada product.” With statements like these, Canadians understandably began to question some of their trade agreements. The same week Trump made these statements, and after months of humiliating our trading partners in the North, Canada signed an agreement to cut tariffs on 50,000 Chinese electric vehicles.

During the final months of the Biden presidency, the administration imposed a 100% tariff on Chinese EVs. The Canadians followed suit, with their own 100% tariffs on Chinese-made electric vehicles. The reasoning is quite simple: flooding the market with cheap electric cars from China could hurt the domestic auto manufacturing economy, leading to factory closures and layoffs. Since every direct job in the automotive sector also creates seven to 10 jobs in related sectors, there is a strong incentive to have those domestic factories produce products.

When Trump came to power, he immediately set his sights on tariffs. But they are not just any rates; unpredictable rates that impact a sector one week, while not the next. Ultimately, we ended up in a system that some automakers say helps level the playing field with countries like China, but Trump didn’t stop there. Trump has made it clear that he wants Canada to become the 51st state and that the United States should control Greenland to protect national security, even though we already have a base there to defend our interests. Not surprisingly, these statements made Canadians so angry with us that many Canadians boycotted American goods.

This is not good news for North American automakers. Mike Murphy, CEO of the American EV Jobs Alliance, does not mince his words. “When U.S. trade policy becomes chaotic, unpredictable and destructive, bad outcomes are inevitable,” he said in a statement. “President Trump has really messed up when it comes to standing up for jobs in the American auto sector and North American auto manufacturing.” It also wouldn’t be surprising if this news causes automakers to rethink their Canadian EV strategy.

Ford, for example, has EVs on the way that will be built on its new Universal EV Platform. This platform will support low-cost electric vehicles, including a small pickup, and should hit the market sometime in 2027, at least if the current timeline holds. The starting price is expected to be $30,000 USD (or almost $42,000 CAD). Using our fuzzy math, that would make the Ford EV $7,000 CAD more expensive than the Chinese imports hitting the streets. If people aren’t willing to pay the price difference for the Ford badge, and are willing to buy a Chinese brand they may have never heard of, it would essentially kill Ford’s cheap EV on arrival in Canada.

Trump has not made it easy for American car manufacturers. Murphy lays the blame squarely at his feet. “China is not an ally of the US, and its state-sponsored automotive capture strategy is based on flooding foreign markets and deindustrializing geopolitical rivals,” he said. “President Trump often says he is on the side of the auto workers; unfortunately, his actions show that these appear to be the auto workers of China.”

There are still some unknowns, but with Chinese EVs gaining a foothold in North America, it seems like only a matter of time before they reshape the entire auto industry.