Freeland Weighs Ban on Chinese Cars, AUKUS in the Offing
Ottawa openly floats banning Chinese automobiles as National Defence Minister Bill Blair signals Ottawa is one step closer to AUKUS membership.
This week's edition of IPD's Canada-China Brief covers Defense Minister Bill Blair's remarks on Ottawa's steps toward joining the AUKUS security pact, as well as Ottawa's consideration of additional restrictions on Chinese auto technology.
From Our Experts
On Defence Minister Blair’s remarks on Ottawa joining AUKUS:
Jeremy Paltiel
Senior Fellow, Institute for Peace & Diplomacy
Minister Blair’s remarks in Japan comes in the context of ongoing discussions in Ottawa about how Canada might become involved in the “second pillar” of AUKUS. This comes in the context of Canada’s Indo-Pacific Strategy and Canada’s efforts to join U.S. allies in the Indo-Pacific about how to respond effectively to a “disruptive” China. All of this comes in the context of the strategy laid out implicitly within the IPS about how to leverage Canada’s efforts incrementally to be more effective, and how an incremental approach might fit with the aims and purposes of AUKUS. It should be said that among potential AUKUS members, Japan has been the most forthright and welcoming of broader participation and this in fact is one reason why Minister Blair made these remarks in Japan and why he hedged Canada’s participation on support from the other AUKUS members.
Canada’s value will depend upon what kinds of capacity Canada can contribute and what kinds of capacity AUKUS requires. It will be evaluated with respect to the extent that AUKUS evolves beyond nuclear submarines to other aspects of military-technological competition with China and how that technological competition is regarded by regional states. Many states in the region particularly in ASEAN are concerned about growing technological competition and its effect on trade and regional supply chains they are involved in. Even Japan remains concerned about “decoupling” and remains, like South Korea, deeply embedded in Asian supply chains which link to China. While determined to deny China the upper hand in military-technological competition it prefers “de-risking” that does not break and isolate Asian supply chains. Canada has a much more modest role in technology hardware supply chains.
China is likely to view this effort through the lens of ongoing strategic competition with the U.S. and will confirm the Chinese view of Canadian policy as largely subordinated to U.S. efforts. It will see this as a general sign of a hostile Canadian attitude towards China’s rise, but its actions will be calibrated to the degree to which Canada affects the balance of power in the Western Pacific and the particular vulnerabilities Canada’s limited capacity presents that China can exploit both to advantage itself, and to warn other middle and smaller powers against aligning against China. Participation in AUKUS is likely to test the limits of Canada’s incremental approach.
Jeffrey Reeves
Senior Washington Fellow, Institute for Peace & Diplomacy
The Defence Minister’s announcement that Canada is in discussions to join AUKUS highlights the Canadian Armed Forces' (CAF) lack of a standalone strategic approach to the Indo-Pacific, suggesting an intention to rely on its partners’ regional initiatives and capabilities. Already under-resourced in both NATO and the Arctic, the idea that the CAF seeks to expand its military presence and security commitments further borders on strategic negligence. What does Ottawa hope to offer AUKUS, and what does it expect to gain? The answer to both questions seems to be a resounding “nothing tangible.”
Proponents of Canada’s involvement will argue that cooperating with AUKUS strengthens defence ties with key allies and democratic "like-minded states," demonstrates a commitment to the "rules-based order," and counters Chinese "aggression." However, a critical examination of the costs associated with these largely symbolic benefits suggests that rejecting these tired tropes is a matter of national security. Whatever Canada might gain from siding once again with the global West against the Global South in Asia — as it has in the Middle East — it risks losing through opposition from China and reputational damage among regional states already skeptical of outside powers, particularly Euro-Atlantic ones, interfering in their affairs.
What is the CAF’s true objective in the Indo-Pacific? Does Canada hope to shift the regional balance of power? It lacks the material capacity to do so. Is the goal to support the region’s rules-based order? Asian states possess the agency to maintain it without Canada’s involvement. Or is Canada simply trying to prove to its allies that it remains a viable security partner? If so, focusing on its NATO commitments and meeting its defence spending obligations would be a far more effective approach.
More concerning is the risk that Canada’s deeper involvement in the Indo-Pacific—whether through AUKUS, the Quad, or freedom of navigation operations—may destabilize the region. Western engagement in Asia increasingly carries a “de-escalate through escalation” mentality, a dynamic Canada would be wise to avoid. Ottawa’s efforts would be better spent on geoeconomic initiatives, where it can exert meaningful influence through investment, finance, and commercial activities.
An alternative approach could be modeled after Germany’s strategy. Rather than aligning strictly with U.S.-led initiatives, the Bundeswehr balances military partnerships through multilateral engagement, prioritizing dialogue over exercises. This does not suggest that Berlin is passive—Germany recently sent the frigate Baden-Württemberg through the Taiwan Strait. Instead, Germany understands the complexities of regional security and works to offset perceptions of Western dependence with regional collaboration. The CAF could benefit from adopting a similar approach.
Andrew Latham
Senior Washington Fellow, Institute for Peace & Diplomacy
At first glance, AUKUS looks like an enticing proposition. It’s not just another military partnership—it’s an exclusive club of like-minded democracies aiming to counterbalance China's growing influence in the Indo-Pacific. By joining, Canada would seemingly position itself as a more assertive player on the global stage. But, in reality, Canada’s value to AUKUS, and AUKUS’ value to Canada, are far less clear. More importantly, AUKUS would divert Canada’s focus away from regions that actually matter for our security—the North Pacific, the Arctic, and the North Atlantic.
Let’s not mince words: Canada is not a Pacific power in the way Australia or the United States is. While we certainly have interests in the Pacific, our geography, economy, and defence priorities lie much closer to home. AUKUS is designed for countries with direct stakes in the South China Sea and the broader Indo-Pacific region, where tensions with China are palpable and growing. Australia, with its close proximity to China, naturally finds itself on the frontlines of this geopolitical contest. For Canada, joining AUKUS would represent a significant shift away from our traditional focus on the North Atlantic and Arctic regions.
The truth is, Canada’s strategic priorities lie in defending our northern and maritime frontiers, not projecting power halfway across the globe. As a country with the world’s longest coastline, our security concerns should be oriented toward our Arctic territories, where climate change is opening new sea routes and where Russian and Chinese ambitions are increasingly making waves. The North Pacific, too, is of greater importance to our national security, as trade routes and regional stability here directly affect Canada’s economic interests.
Joining AUKUS may offer symbolic prestige, but it would do little to enhance Canada’s actual defence capabilities in the areas that matter most. Worse, it could entangle us in conflicts that are far removed from our core strategic interests, while diverting resources from the regions where Canada’s future truly lies.
Top Stories
In Tokyo, Ottawa Signals AUKUS Membership is in Its Sights
In a bid to shore up Indo-Pacific defence ties, National Defence Minister Bill Blair touched down in Tokyo earlier this month as part of a visit that would also take him to Seoul. While in the region, Blair touted Ottawa’s progress on consultations with AUKUS members to join the security pact, particularly its technology-sharing pillar.
‘Very optimistic’ — In a sit-down interview, Minister Blair spoke of what Ottawa can offer, Canada’s prospective membership, and how China factors into the calculus:
“There have been important discussions about processes and platforms on a project-specific basis on where other nations, including Japan and ourselves, might participate… I would respectfully wait until they’ve come to their determination, but I’m very optimistic.”
In the same conversation, Blair stated that Chinese military activity may be raised at G7 talks next month as “it’s an important opportunity for us to have a conversation among the G7 partners about some of the activities that are deeply concerning to Japan and to Canada and to the United States and others.”
In Tokyo’s readout of Blair’s talks with his counterpart Kihara Minoru, the two “exchanged views on the regional security situation” as the latter “expressed strong concerns over… China’s intensifying military activities around Japan, and in particular, towards the recent intrusion of Japanese territorial airspace.”
Canada’s meeting summary said Blair underscored how Canada has now deployed three warships in the region which “enables cooperation between the Canadian Armed Forces and the Japanese Self-Defense Force through a range of activities such as the NOBLE series of Exercises in the South China Sea.”
Blair also took his messaging on China to South Korea, where he told regional ministers attending the Seoul Defence Dialogue of his “concern at China’s efforts to undermine freedom of navigation in the South China Sea, including its dangerous and destabilizing actions against Philippine vessels.”
AUKUS infighting — Retired officials in the region have in recent months raised increasing concerns over the purpose and ramifications of the pact:
Former Australian Prime Minister Paul Keating argued that with AUKUS, “the Albanese government is returning to the anglosphere to garner Australia’s security… doing the very thing that all my life I had trenchantly opposed” by “finding our security from Asia rather than our security in Asia.”
Bob Carr, Australia’s ex-foreign minister, has over the past year characterized AUKUS’ pillar two as a figleaf “cobbled together to make it look like there's more to AUKUS than subs — there isn't,” adding that its aim is to lock Canberra into the U.S. as its primary defence supplier.
Former New Zealand PM Helen Clark echoed the same, saying pillar two is “part of stepped up choreography towards New Zealand signing up to a U.S.-led military relationship” and to “U.S. strategic objectives in Asia Pacific aimed at [the] illusion of maintaining military primacy.”
Gareth Evans, another Australian ex-foreign minister, argued “it defies credibility to think that Washington will ever go ahead with its sale of Virginias to [Australia] in the absence of an understanding that they will join the U.S. in any fight in which it chooses to engage anywhere in our region, particularly over Taiwan.”
What commentators think — Some Canadian experts spoke of Ottawa’s potential participation in more positive terms:
Vina Nadjibulla, Vice-President at the Asia Pacific Foundation of Canada, said pillar two “offers strategic convergence on deterrence of a rising, more aggressive China. It would be unfortunate for us to be left out of the strategic conversations of how the U.S. and its key allies are going to be looking at integrated deterrence.”
“We really are absent from a lot of these strategic partnerships, so AUKUS Pillar 2 offers, perhaps, the easiest way for us in because we actually have something to bring to the table. We need to be part of conversations that are not just bilateral, but are [multilateral].”
Thomas Juneau, Professor at the University of Ottawa, suggested that “the fear is that the second pillar of AUKUS evolves over the years into a significant… information-sharing mechanism on the emerging and disruptive tech front, and that we are either not a part of that, or that we are marginalized.”
Canada Threatens Chinese Car Ban as Beijing to Investigate Tariffs
Deputy PM Chrystia Freeland has publicly floated matching a recently proposed U.S. ban on Chinese autonomous cars and auto technology. The move comes as China’s Ministry of Commerce announced countermeasures to Ottawa’s EV tariffs, including an announcement of China’s first-ever anti-discriminatory trade investigation.
Hitting the brake — Freeland’s recent remarks this week upped the ante on tariff action Ottawa has already promised:
Asked on whether Canada would consider following the U.S. ban, the Deputy PM said “the short answer is: absolutely. A longer answer is our government has made very clear that… we take very seriously the security threat from China,” adding that “we are looking at whether we need to impose further measures.”
The U.S. Commerce Department announcement in question called for a ban to "prohibit the sale or import of connected vehicles integrating specific pieces of hardware and software, or those components sold separately, with a sufficient nexus to the People’s Republic of China.”
The Chinese Commerce Department responded that the ban would “disrupt and distort the global automotive industry chain and supply chain, and will also harm the interests of American consumers,” urging the U.S. to “stop its wrongful approach of broadening national security concerns.”
Taking it to the WTO — China’s Ministry of Commerce publicized its countermeasures to Ottawa’s tariff hikes in a press conference earlier this month:
A ministry spokesperson announced that “in accordance with Articles 7 and 36 of the Foreign Trade Law of the People’s Republic of China, China will initiate an ‘anti-discrimination investigation’ into Canada’s restrictive measures and will take corresponding measures as necessary based on actual circumstances.”
Citing domestic industry concerns and the rise in Canadian canola exports to China by 170% year-on-year amid price declines, they added that Canada was “suspected of dumping” and “unfair competition,” to which Beijing will initiate an anti-dumping investigation into Canadian canola and chemical product imports.
The Foreign Trade Law’s Article 7 in question stipulates that “in the event that any country or region adopts prohibitive, restrictive or other similar measures that are discriminatory in nature against [China],” Beijing may “in light of the actual conditions, take countermeasures against the country or region in question.”
Article 36 enables Beijing to probe “trade barriers of relevant countries” and “whether such foreign trade remedies as anti-dumping, countervailing and safeguards should be taken,” in addition to assessing “matters concerning national security and interests in foreign trade.”
China’s National People’s Congress also passed a newly reformed Tariff Law this past April which legally authorizes Beijing to levy “retaliatory measures such as the imposition of retaliatory tariffs” — legislation formally set to take effect this coming December.
‘Extremely subjective’ — Chinese trade experts have taken aim at the political nature of Canada’s tariffs relative to those calibrated by the European Union:
Liang Ming, Director of the Chinese Academy of International Trade and Economic Cooperation's Institute of International Trade, said Canada “blindly followed the United States without conducting its own investigation or research, a move that is extremely subjective, vicious and unscrupulous.”
In separate comments, Liang remarked on the “crude” nature of Canada’s tariffs unlike the U.S. and EU’s anti-subsidy investigations which “at least disguise themselves as investigations” compared to how “Canada did not announce any investigation but directly imposed tariffs.”
Zhou Xiaoyan, Vice President of the China Council for International Investment Promotion, noted the milestone of the probe being the first of its kind by Beijing, adding that anti-dumping investigations are “normal practice” under WTO rules if dumping is identified and deemed damaging.
‘We expect engagement’ — As Ottawa expressed concern, agricultural interests nationwide shared dismay and encouraged the government to manage trade relations:
In a letter to both ministers, provincial Saskatchewan counterparts Jeremy Harrison and David Marit wrote of being “disappointed” in bearing the brunt of Chinese retaliation, adding that “we encourage and expect engagement from the Government of Canada at the highest level to resolve this issue quickly.”
Chris Davison, President of industry group SaskCanola, responded that “China is an important and valued market for Canadian canola” and that “we are confident that an investigation into Canada’s canola trade with China will demonstrate alignment with and reinforce our support for rules-based trade.”
The Canadian Canola Growers Association underlined that “China is a market of critical importance” and that they “rely on rules-based international trade,” adding that “with China being our second-most important market for canola exports, it is critical that issues facing canola farmers are brought forward in discussions.”
What commentators think — Trade observers have underscored the new territory that both sides are entering:
Meredith Lilly, Simon Reisman Trade Policy Chair at Carleton University, called China’s move “a pretty subdued response,” saying “if it does go ahead with an antidumping investigation, frankly, that’s a rules-based approach… that’s different from what China has done in the past, which has been typically to ban [immediately].”
Marc L. Busch, Global Fellow at the Wilson Center’s Wahba Institute for Strategic Competition, suggested the move “sends a message to the U.S. that Canada is willing and able to close Fortress North America to Chinese trade and investment, which is key if the US-Mexico-Canada Agreement is to be renewed in July 2026.”
What They’re Saying
We don’t think it’s helpful to link issues, to link industries, to react to one industry by responding to another. We think that there are ways for Canada to try to manage the issue that can help reduce the risk of that. One of the biggest is to work multilaterally with partners… Canada’s food exporters are concerned about a move away from rules-based trade, and that’s not just a Canadian thing. If you look the biggest economies in the world, the United States, China, the European Union are making some moves away from rules-based trade, and have been over the last few years, and that’s bringing along more mid-sized economies like Canada.
– Michael Harvey, Executive Director, Canadian Agri-Food Trade Alliance
Ottawa’s use of unilateral tools to implement 100 per cent tariffs on EVs is a hallmark of a trade war. Top this off with the politically charged rhetoric Canada has used, then we shouldn’t be shocked that China has responded in kind. Indeed, Beijing waited one week before launching an anti-dumping investigation into Canadian canola. By acting rashly and inviting such retaliation, the Canadian government has effectively sacrificed Western interests for those of Ontario and Quebec… By sassing off and carbon-copying the U.S.’s approach, we denied ourselves a seat at the bargaining table and opted for one at the kids’ table instead.
– Jeff Mahon, Executive-in-Residence, Canada West Foundation
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Image credit: Department of Defense | World Economic Forum