Cheap Chinese EVs Are Coming but Not Everyone Is Happy About It

Canada has reduced its tariff on imported Chinese EVs from 100% down to 6.1%.

Imports are capped at 49,000 cars for the first year, growing to 70,000 by year five.

Some Canadian politicians aren't too happy with the deal, citing cybersecurity concerns and hurting Canada's relationship with the U.S. Several American officials expressed concerns as well.

Once, the United States and Canada moved almost entirely in lockstep on manufacturing issues—especially when it comes to the auto industry. Cars, parts and the manufacturing of both are closely tied together on both sides of the border, so what's been good for one country has long been considered good for the other.

But that partnership saw its biggest breakdown yet this week as Canada struck a deal to reduce its 100% tariffs on Chinese-imported electric vehicles, opening North America's deeply intertwined auto industry to a whole new level of competition.

Granted, this break in policy isn't entirely unprecedented. Since President Donald Trump took office last year, Canada’s relationship with the U.S has been incredibly tumultuous, as Trump has openly challenged Canada’s sovereignty while instituting tariffs that many experts say were meant to pummel Canada into submission. Amid those trade battles with the U.S., Canada has been open about its desire to decouple from its neighbor to the south.

But what started with alcohol has escalated to the car market, and while many Canadian buyers squeezed out on costs might rejoice at the idea of more $35,000 options, this development is hardly seen as a win by everyone.

Doug Ford, the Premier of Ontario, has been vocal to the Canadian press about how concerned he is, both for international relations and for what he described as potential threats to national security.

"It's just a terrible, terrible, miscalculated decision by the Prime Minister," Ford said at a press conference after the country's leader, Mark Carney, struck the deal in Beijing. "This is a self-inflicted wound to an already injured Canadian auto industry. Finding a resolution to U.S. auto tariffs just got more difficult."

Ford's contention is understandable. As a conservative, he's on the opposite side of the fence as the liberal Carney, but the region he represents includes Canada's biggest auto manufacturing sector. The region stretching from Windsor to Toronto is known as the Ontario Automotive Corridor because it's such a carmaking powerhouse. But it has shrunk in recent years, and new competition from cheap Chinese imports could potentially devastate the region's jobs and output.

Ford isn’t the only one not all that optimistic. Mike Murphy of the American EV Jobs Alliance, a nonpartisan group that promotes EV adoption across party lines, said in a statement that he feels the outcome is a result of the Trump administration bungling its trade deals with Canada. Murphy said the pivot is a result of trade deals that do not prioritize U.S. interests.

“American automakers and autoworkers are caught in the middle of the most expensive industrial transition in a generation," Murphy said. "Automakers, both American and those of our democratic allies who proudly manufacture vehicles here, are investing billions to build affordable electric vehicles here at home, retrain workers, and retool factories. That effort is undermined by trade instability, unclear rules, and a hostile posture toward our closest North American and European trading partners."

The Zero Emission Transportation Association, a U.S.-based EV advocacy group, also warned of wider risks to the auto industry.

"This dramatic shift in policy shows that the United States’ auto policies are out of step with the global market and risk harming future American technological dominance and American jobs," Executive Director Albert Gore said in a statement. "If the United States does not invest in [EVs], our global competitors will. This is why it is so critical that we continue to invest in the electric vehicle and battery supply chain here at home.”

Is this just saber-rattling? Perhaps. The trade deal is capped at 49,000 cars for its first year, expanding outward to 70,000 within five years. According to reporting from the CBC, this is only about 3% of Canada’s auto market. It's also abo