Key Takeaways
- China’s ambassador to Canada, Wang Di, says Beijing wants to partner with Canadian autoworkers to create good jobs and build cheaper cars.
- A recent agreement between Canada and China will allow Chinese electric vehicles into the country at a 6.1 per cent tariff rate, with an annual import quota of up to 49,000 vehicles.
- The deal has been criticized by some, including Ontario Premier Doug Ford and Unifor union president Lana Payne, who argue that it risks flooding the market with cheap EVs and limiting Canadian automakers’ access to the US market.
- China has agreed to ease its agricultural tariffs in return for allowing Chinese EVs into the Canadian market.
- The Canadian government sees the deal as part of a larger strategy to eventually build Chinese EVs in Canada, which could create jobs and stimulate economic growth.
Introduction to the Agreement
The recent agreement between Canada and China to allow Chinese electric vehicles into the country has sparked controversy and debate. Critics argue that the deal, which includes an annual import quota of up to 49,000 Chinese EVs, will flood the market with cheap vehicles and limit Canadian automakers’ access to the critical US market. However, Chinese Ambassador to Canada Wang Di says that Beijing wants to partner with Canadian autoworkers to create good jobs and build cheaper cars. According to Wang, the agreement will be beneficial to the development of the Canadian EV industry, will help create jobs, and will provide Canadian consumers with higher quality and more affordable cars.
The Terms of the Agreement
The agreement, signed by Prime Minister Mark Carney and Chinese President Xi Jinping, will allow Chinese electric vehicles into the country at a 6.1 per cent tariff rate. The deal requires that half of the imported vehicles have an import price of under $35,000 by 2030. This move is seen as a significant development in the trade relationship between Canada and China, which has been strained in recent years. In 2024, Canada joined the US in putting a 100 per cent tariff on Chinese electric vehicles, citing concerns over unfair subsidies and dumping. China responded by slapping tariffs on Canadian agricultural imports, which have now been eased as part of the new agreement.
Criticism of the Deal
Despite the potential benefits of the agreement, critics argue that it poses significant risks to the Canadian automotive industry. Ontario Premier Doug Ford has described the deal as "lopsided" and warned that it could lead to a flood of cheap EVs in the market, with no guarantee of Chinese investment. Unifor union president Lana Payne has also spoken out against the deal, calling it a "self-inflicted wound" that will allow China to quickly seize market share. Analysts have also raised concerns about the potential impact of Chinese subsidies on the Canadian market, warning that they could artificially drive down prices and contribute to further deindustrialization.
China’s Commitment to Cooperation
However, Wang Di has sought to reassure critics that China is committed to cooperation and mutual benefit. According to Wang, the character of China-Canada practical cooperation is complementarity and mutual benefit, and Beijing encourages and supports Chinese companies to make investments and start up companies in Canada. Wang also emphasized that China wants to see investments that build up Canada’s manufacturing sector, and that the agreement will provide opportunities for Canadian autoworkers to partner with Chinese companies. A senior government source has also suggested that Ottawa does not see the deal as an economic threat, but rather as part of a larger strategy to eventually build Chinese EVs in Canada.
The Potential for Job Creation and Economic Growth
The agreement has the potential to create jobs and stimulate economic growth in Canada, particularly in the automotive sector. Wang Di has emphasized that Chinese companies will come to Canada to work with Canadian partners for investment, opening factories, or joint ventures, which will be win-win for both countries. Analysts have also pointed out that Canadian companies, such as Magna International, are already partnering with Chinese automakers to build cars in other countries, and that similar partnerships could be established in Canada. By leveraging regional advantages and working together, Canada and China can create a mutually beneficial partnership that drives economic growth and job creation.
Conclusion and Future Prospects
In conclusion, the agreement between Canada and China to allow Chinese electric vehicles into the country has sparked controversy and debate. While critics argue that the deal poses significant risks to the Canadian automotive industry, proponents argue that it has the potential to create jobs and stimulate economic growth. As the agreement moves forward, it will be important to monitor its impact on the Canadian market and to ensure that it is implemented in a way that benefits both countries. With careful planning and cooperation, the agreement could mark an important step forward in the trade relationship between Canada and China, and could help to drive economic growth and job creation in the years to come.
