Carney Defends China EV Deal With Trump, Outlines Conditions for Chinese Auto Investments in Canada

Prime Minister Mark Carney says he discussed his Chinese electric vehicle deal with U.S. President Donald Trump at the G7 summit in France.

The discussion took place as Chinese electric vehicles are entering the Canadian market and as Ottawa is courting China to establish production lines in Canada.

Trump and his officials had sharply criticized Canada’s deal with China, while Carney told reporters on June 17 that the president “likes the structure” of it.

“I was explaining the actual structure of the deal… He likes the structure. Actually, we had a follow-up conversation about it as well,” Carney said.

The prime minister’s comments come after a hot mic captured him appearing to tell Trump at a working luncheon during the June 16 G7 Summit that Canada would “cap” Chinese EV imports at 49,000, which he said represents “less than 3 per cent of the market.”

The Epoch Times contacted the White House for comment but didn’t hear back before publication time.

Carney’s government struck a deal with Beijing in January to allow 49,000 Chinese EVs into Canada at a reduced tariff rate of 6.1 percent from the previous rate of 100 percent.

The quota is set to increase each year and reach 63,037 units by 2031, meaning Canada will take in nearly 300,000 Chinese EVs in five years, according to information tabled in the House of Commons on May 29 by International Trade Minister Maninder Sidhu.

Statistics Canada data indicates the quota represents nearly 50 percent of Canada’s battery EV market, with 115,049 battery EVs sold in Canada last year.

Carney told reporters on June 17 that the deal with China aims to encourage commercial Chinese investment in Canada, noting that Ottawa is only interested in Chinese EV investment that involves Canadian production.

“We’re not interested in kits being put together in Canada,” he said. “We’re interested if there are joint venture partnerships, Canadian control, substantial value add, Canadian labour standards, substantial jobs, etc.”

These issues will be discussed during Industry Minister Mélanie Joly’s visit to China this week, he added. Joly’s department said on June 15 that she will meet with government officials and stakeholders to advance commercial opportunities “with appropriate guardrails.”

Joly’s office said she met Chinese automakers BYD and Shanghai Launch on June 16, and is set to meet Geely Auto and Chery Auto on June 17.

Sidhu also met with representatives from Chery last week to discuss the automaker’s joint ventures in other countries and the potential for similar operations in Canada.

Chinese state media outlet Xinhua has reported that BYD, Chery, and Geely have all taken preliminary steps to enter the Canadian market, while some market experts expect more Chinese automakers to follow suit.

Honda Canada President and CEO Dave Jamieson warned last week that Canadian automakers are facing “rising competition from low-cost, state-subsidized, non-market-oriented producers,” and that large-scale imports with “minimal assembly or knock-down operations” could create market imbalances.

Forced Labour Issues

When testifying before a House of Commons committee on June 16, Foreign Affairs Minister Anita Anand was asked about the Chinese EV deal and the government’s new bill to counter forced labour.

Bloc Québécois MP Alexis Brunelle-Duceppe asked Anand whether she will include Chinese EVs on the list of goods suspected to be produced by forced labour under Bill C-35.

“I cannot confirm what goods will be on the list,” Anand responded, noting that the government will speak to stakeholders and other groups to hear their perspectives. She said the list will be prepared when Parliament returns in the fall, and it will be discussed with the foreign affairs committee.

“If we can see that [Chinese] EVs require forced labour in their supply chain, will you put those EVs on the list of products that are banned in Canada?” Brunelle-Duceppe asked again.

Anand responded that any products involving the use of forced labour are “already prohibited under Canadian law,” and Bill C-35 provides “additional tools” to the Canada Border Services Agency (CBSA) to ensure they do not enter the country.

China experts have warned that vehicles and parts fabricated in China have been found to be made using forced labour.

Canada is obliged under the Canada-United States-Mexico Agreement on free trade to not import products made in whole or in part by forced labour.

The federal government tabled Bill C-35 on June 12 to strengthen Canada’s legal framework to prevent goods made with forced labour from entering the Canadian market.

Bill C-35 would allow Anand to establish a list of goods for which there are “reasonable grounds” to suspect they are produced by forced labour. The list would also indicate regions or countries where forced labour is a possibility.

Anyone importing goods on the list would need to prove to the CBSA, at the request of a customs officer, that the products are not produced with forced labour. Otherwise, the goods would be prohibited from entering the Canadian market.

The bill comes after the U.S. administration threatened on June 2 to impose additional tariffs on 60 countries, including Canada, for allegedly failing to institute forced labour restrictions.