COLUMN: Canada Sells Its Automotive Soul to Beijing While Washington Looks the Other Way

49,000 Chinese Vehicles and Unanswered Questions

The agreement negotiated by Carney during his visit to China in January—the first by a Canadian prime minister since 2017—provides for the annual import of 49,000 Chinese electric vehicles at the most-favored-nation tariff rate of 6.1%, thereby exempting them from the 100% punitive tariff to be imposed in 2024. By 2030, this quota could rise to 70,000 vehicles, at least 50% of which would cost less than 35,000 Canadian dollars. In exchange, China has agreed to begin phasing out tariffs on Canadian agricultural products. But the core of the strategy goes far beyond imports. Joly revealed that she met with executives from BYD, the world’s largest electric vehicle manufacturer, and Chery Automobile during her recent trip to China. The goal? To create a “Canadian-Chinese car” that would be exported worldwide. “We believe that these major Canadian champions can partner with Chinese electric vehicle companies to manufacture a Canadian-Chinese car and export it all over the world,” the minister said with an enthusiasm that seems to ignore the obvious risks.

A Canadian-Chinese car. Let me savor that phrase for a moment. What does that mean, exactly? A car designed in Canada with Chinese technology? Or a Chinese car with a Canadian flag stuck on it? Because let’s be honest, when we talk about a “partnership” with Chinese companies, we all know who’s really pulling the strings. China doesn’t give anything away for free. It invests, it establishes a foothold, it dominates. And meanwhile, they’re selling this to us as a victory for economic diversification.

Magna, Linamar, and Martinrea: Accomplices or Victims?

The three Canadian auto parts giants mentioned by Joly are no strangers to China. Magna International, Linamar, and Martinrea International already have established operations in China. Their expertise and on-the-ground presence make them natural candidates to participate in this joint venture. Joly also touched on the potential role of QNX, the Ottawa-based software developer owned by BlackBerry, in this project. “I have already raised with many Chinese companies the fact that QNX is a cutting-edge company that we could develop even further on a global scale,” she said. The idea would be to integrate Canadian software into vehicles to address security concerns. But is that really enough? The minister asserts that “we can find a way to have software in the car that will address security concerns” and that labor standards will meet Canadian expectations. These are promises that sound good on paper but will have to be proven in practice.

I find it hard to believe that Canadian companies will be able to impose their terms on state-backed Chinese giants. Magna, Linamar, Martinrea—these are large companies, to be sure, but how do they stack up against BYD, which sold one million vehicles for export in 2025 alone? Up against a Chinese government that controls 70% of global battery production and 60% of the critical minerals used in batteries? It’s like David versus Goliath—except this time, David doesn’t even have a slingshot. He just has the hope that Goliath will be nice.

BYD and the Electric Empire That’s Shaking Up the World

One thing is clear: China dominates the electric vehicle market like no other. In 2025, the country maintained its position as the global leader in the production and sales of new energy vehicles for the eleventh consecutive year. BYD, China’s flagship automaker, saw its sales in Germany skyrocket more than tenfold in January 2026, reaching 2,629 units—more than double Tesla’s 1,301 registrations. China boasts the world’s largest and most comprehensive industrial supply chain for electric vehicles. Thanks to economies of scale, the cost of components is relatively lower than that of products manufactured elsewhere. Carney himself praised Chinese vehicles during his visit to Beijing: “China’s strengths in the electric vehicle sector are undeniable. They produce some of the most affordable and energy-efficient vehicles in the world.” A compliment that almost sounds like a capitulation. Chinese experts, such as Zhang Xiang, secretary-general of the International Intelligent Vehicle Engineering Association, assert that this cooperation is “a pragmatic choice for Canada in the context of the global transition to electrification and U.S. trade pressures.”

Pragmatic. That’s the word people use when they want to pass off a bad decision as realism. Yes, Chinese electric vehicles are impressive. Yes, they’re affordable. Yes, China dominates this market. But should we really applaud when a Western country decides to entrust part of its industrial future to a regime that monitors its citizens, represses minorities, and threatens Taiwan? Pragmatism has its limits. Sometimes, you have to know how to say no, even if it comes at a high cost.

Connected Cars That Know Too Much About Us

Modern vehicles are no longer just a means of transportation. They are computers on wheels, capable of collecting massive amounts of data: location, driving habits, and personal information provided during purchase and financing. Vehicles manufactured by companies under the influence of the Chinese government could theoretically be equipped with capabilities that go beyond standard telematics systems. The U.S. Federal Communications Commission has banned telecommunications equipment from Huawei and ZTE on national security grounds. This precedent suggests that Western governments should take concerns about technology transfer seriously. Modern vehicle systems can be accessed remotely, which serves legitimate purposes such as recovering a stolen vehicle, but also represents a potential vulnerability if controlled by potentially hostile parties. The Heritage Foundation, a conservative American think tank, published a scathing commentary titled “Mark Carney’s Dangerous Electric Car Deal with Beijing,” pointing out that “vehicles manufactured by companies subject to Chinese government influence could theoretically be equipped with capabilities beyond standard telematics systems.”

People will tell me I’m paranoid. That this is a conspiracy theory. But frankly, after everything we’ve seen with Huawei, after all the revelations about Chinese industrial espionage, after all the warnings from Western intelligence agencies, how can anyone still be so naive? These cars are going to collect data. A lot of data. And where exactly is that data going? To Ottawa? Or to Beijing? Joly says we can “find a way” to ensure the software is secure. But “finding a way” is no guarantee. It’s just wishful thinking.

Import Credits and Promises to the Japanese

The agreement with China is just one piece of the puzzle. Carney unveiled a comprehensive automotive strategy that includes several components. The federal government will launch a C$2.3 billion five-year electric vehicle accessibility program, offering purchase or lease incentives of up to C$5,000 for battery-electric and fuel-cell vehicles, and up to C$2,500 for plug-in hybrids. Canada is maintaining its retaliatory tariffs on U.S. automobiles but plans to implement an import credit system. The more cars a company manufactures in Canada, the less it will pay in tariffs on imported U.S. vehicles, and it will also be able to sell surplus credits to other companies. Today, the biggest beneficiaries would be Honda and Toyota, the two Japanese companies that account for three-quarters of Canadian auto production. Joly said, “This is a way to compensate companies like Honda and Toyota that are increasing their production in Canada. It’s another way for them to generate revenue.” ” The government is also targeting automotive investments from other countries, with South Korea being a major focus. Hyundai and Kia sell hundreds of thousands of cars in Canada but do not manufacture any locally.

That’s interesting. While bowing to Beijing, they’re also trying to woo Seoul and Tokyo. A diversification strategy, they say. But it mostly looks like a country running in all directions, trying to please everyone, making promises left and right without really knowing how it’s going to keep them. Honda and Toyota have been reliable partners for decades. Why not focus on them instead of chasing risky partnerships with China? Oh right, because China has the money, the technology, and above all, it promises miracles.

Washington threatens, Beijing smiles, Ottawa hopes

The U.S. reaction was swift. The Trump administration threatened to impose a 100% tariff on all Canadian products if Canada strikes a deal with China. Fox News reported this threat in a tone that leaves no doubt about the seriousness of the warning. But Carney seems determined not to back down. On the Chinese side, Foreign Ministry spokesperson Guo Jiakun emphasized that “China believes countries should approach state-to-state relations in a win-win spirit rather than with a zero-sum mindset, and through cooperation rather than confrontation.” These conciliatory words do little to hide Beijing’s ambitions. The Global Times, a Chinese state-controlled newspaper, published a laudatory article on the new Canadian strategy, stating that it “demonstrates the Canadian government’s pragmatic approach to strengthening cooperation with China in the field of electric vehicles.” Chinese expert Bao Jianyun stated that this cooperation “should serve as a model for more countries, particularly U.S. allies that have faced additional tariffs from Washington.” In other words, China sees the Canadian agreement as an opportunity to divide the Western bloc.

And that’s how you become a pawn on the geopolitical chessboard. Canada, a country that sought to be an honest broker—a bridge between the major powers—finds itself being exploited by Beijing to weaken the Western alliance. Trump is brutal and unpredictable, sure. But at least we know where he stands. With China, we’re playing with fire. A fire that burns slowly, seeps everywhere, and eventually consumes everything. Carney thinks he can play both sides. But in this game, there are no winners—only losers who take longer to realize they’ve lost.

Between Economic Pragmatism and Identity Concerns

A recent poll conducted by the North American research firm Leger revealed that a majority of Canadians support allowing more Chinese electric vehicles to be sold in Canada. This public support lends some legitimacy to Carney’s strategy, but make no mistake: public opinion is far from unanimous. The Global Automakers Association of Canada was quick to voice its concerns, fearing that Chinese imports could undermine sales of vehicles manufactured in Canada. Auto unions, traditionally powerful in Canada, are watching this opening to China with concern. They fear that labor standards will not be respected and that Canadian jobs will be threatened in the long term. Joly attempted to reassure them by stating that “we believe we are capable of ensuring labor standards that align with what we accept and expect in Canada, and that local supply chains in Canada can be created as a result of these investments .” But promises aren’t always enough to allay concerns. The question of national identity also arises: Is Canada prepared to see its automotive industry—a symbol of its industrial prosperity—come under Chinese influence?

Canadians want affordable electric cars. That’s understandable. But at what cost? Are we willing to sacrifice our industrial independence to save a few thousand dollars on a car? Are we willing to turn a blind eye to security risks, ethical issues, and technological dependence, just because BYD makes nice, inexpensive cars? I’m not judging people who want to save money. I understand. But we also need to look beyond the sticker price. We need to see the real cost, the hidden cost, and the long-term cost.

There’s a fine line between boldness and blindness

Mark Carney’s strategy to transform the Canadian auto industry by relying on a partnership with China is bold—that much is clear. Faced with threats from the United States and challenges in the domestic industry, the Prime Minister has chosen to diversify Canada’s trading partners. The goal is clear: to reduce dependence on the United States, attract foreign investment, create jobs, and position Canada as a key player in the transition to electric vehicles. On paper, it all makes sense. China has the technology, the production capacity, and the money. Canada has expertise in automotive parts, a skilled workforce, and an attractive market. Together, they could create a “Canadian-Chinese car” that is competitive on the global market. But reality is rarely as simple as political rhetoric. The risks are numerous: technological dependence, security concerns, geopolitical tensions, the impact on local jobs, and a loss of industrial autonomy. Is Canada replacing one dependency with another? Is it trading the sometimes stifling proximity of the United States for the potentially more dangerous influence of China? Only time will tell. But one thing is certain: this gamble will shape the country’s future for decades to come.

I’d like to believe that Carney knows what he’s doing. I’d like to believe that he has a plan, a vision, a strategy that goes beyond media announcements and campaign promises. But I’m afraid. Afraid that in ten years, we’ll look back and wonder how we could have been so naive. Afraid that Canada—a country that has always been a model of stability and prudence—is playing Russian roulette with its industrial future. Afraid that our children will inherit a country that sold its soul for a few factories and a few thousand jobs. Pragmatism is all well and good. But we must never forget our principles. And frankly, I’m not sure we’ve kept them in mind here.

Signed, Jacques Provost