Carney Opens the Automotive Door, Canadians Warm on China
See the latest analysis and commentary on Carney's effort to attract investment as the public turns positive on Beijing
This week’s Canada-China Brief offers exclusive insight:
U-Turn: Understand Carney’s revamped national auto strategy and his cabinet’s efforts to attract Chinese investment
Data Dive: See the key numbers, charts, and analysis behind the newest polling on Canadians’ rising views of China
Expert voices: New analysis from experts in both Canada and China sheds light on a full view of world events
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Data Dive
The takeaways:
Polls over the last six years from Nanos show that the share of Canadians who want to increase trade with China has grown from 10% to 44%
62% or nearly two-thirds of Canadians recently polled by Leger support allowing Chinese EVs into the domestic market
Up to 57% of Canadians believe increasing trade with China should not be avoided because of fear of U.S. retaliation
Recent surveys from Nanos indicate that the number of Canadians who would be less likely to purchase Chinese EVs has halved in the past three years.
What’s next below the paywall:
More Politico polling on how quadruple the number of Canadians view the U.S. rather than China as the bigger threat
Recent survey findings on how the majority Canadians now prefer to depend on China than on the United States
Tracking the retreat of U.S. automaker production from Canada over the past decade to half its previous scale
IPD highlights the numbers that matter. See more data analysis below the paywall by subscribing now for just $5 a month.
Top Story
Ottawa Calls for Chinese Auto Investment as Canadian Views Climb
Polling and auto U-turn — Unveiling a new national auto sector strategy early this month, PM Carney explicitly defined room for Chinese manufacturing in Canada:
Speaking from an Ontario factory floor, Carney underlined a plan to “drive new Chinese joint venture investment in Canada and allow for a fixed volume of Chinese EV imports” under the framework of the new strategic partnership clinched in Beijing last month in an effort to “further diversify trade.”
With his announcement citing Beijing as “a global leader in EV manufacturing,” the PM declared that “Canada’s new government is fundamentally transforming our economy – from one reliant on a single trade partner, to one that is stronger, more independent, and more resilient.”
The pivot comes as Canadian auto content faces 25% tariffs entering the U.S. market and as Washington seeks to reshore North American production, with data from the Trillium Network for Advanced Manufacturing showing that U.S. automakers reduced Canadian production by more than half since 2016.
In new polling commissioned by Politico this month, over half or 57% of Canadians stated that “it is better to depend on China than on the U.S. under Donald Trump,“ over double the 23% that said it is preferable to depend upon the United States.
Cabinet touts ties — Ministers have maintained momentum on engagement, with Foreign Minister Anita Anand meeting China’s Wang Yi in Munich:
On the margins of the Munich Security Conference, Anand met her Chinese counterpart as both discussed “consensus” on the new strategic partnership and China’s recognition that Ottawa “has adopted a new approach,” with Anand welcoming Beijing’s implementation of visa-free travel for Canadians this month.
China’s Ambassador to Canada Wang Di previewed that Wang Yi is anticipated to visit the country later this year, also noting that "the Indo-Pacific Strategy is inconsistent with this new strategic partnership” — a strategy that Anand had ordered last October to undergo a review.
Last fall, Anand had unequivocally stated that “we need to update that Indo-Pacific strategy. It is not reflective of our economic ambitions in the region. It was fine in 2022 but our relationships in the region have changed. We are on a different footing with India and China.”
Industry Minister Mélanie Joly doubled down on Carney’s policy announcement, reiterating the joint venture potential of Canadian firms like Magna and stating that “these great Canadian champions can partner with Chinese EV companies to make a Canadian-Chinese car to export it around the world.”
What commentators are saying — Experts have shared the observation that Chinese EVs must force a rethink of the global and Canadian auto industry:
Greig Mordue, Associate Professor at McMaster University, suggested that “if we keep our horse hitched to the U.S. automakers, our industry will suffer. It’ll suffer because of tariffs and it will suffer because of the increasing irrelevance of the U.S. automakers… that’s where this is ultimately going.”
Dimitry Anastakis, Chair in Canadian Business History at the University of Toronto, noted that “the Chinese EV deal could have permutations and ripple effects on USMCA that could be very localized in terms of what the deal could look like, but it also could be used as a way to basically say goodbye to the deal itself.”
Elaborating, Anastakis said that “it’s hedging bets a little bit, but it’s also signaling that we’re not going to be beholden to a one-way relationship where we are completely at the mercy of the United States’ car market anymore. We are 80 to 90%.”
Denise Lee, Policy Advisor at Clean Energy Canada, said that Ottawa should allow Chinese automakers and their models to “let them establish a base here, show that Canada has an appetite and an ability to produce EVs and want them, and that is a really strong signal to foreign manufacturers to set up bases in Canada.”
Peter Frise, Professor at the University of Windsor, argued that “trade involves compromise and if Canada is going to be more independent of the U.S., we must find new markets for all Canadian products and that will require all Canadians to think bigger and not be so focussed on their own little piece of our country.”
From the Experts
IPD brings what scholars and opinion leaders in China and Canada have to say on the challenges both countries face.
The Word in Canada
Caroline Brouillette
Executive Director, Climate Action Network Canada | READ
On EV tariffs, I have more questions than answers. The quota deal comes in the context of (also) unjustified U.S. tariffs and Trump’s anachronistic EV policy which has heavily impacted Canadian workers. If we want to maintain our domestic manufacturing capacity, joint ventures with Chinese automakers could be huge, but the agreement does not have anything concrete to show on this. Celebrations on that front thus appear a bit premature, especially because of the highly integrated nature of the North American auto market.
If actual investments are on the table, the Carney government should learn from the painful lessons of the GM and Stellantis plants to ensure workers are not the ones paying the price. Properly investing in charging stations and other key infrastructure to support a quicker adoption of EVs and restoring certainty with the ZEV standard previous timeline, for instance, would be wise.
Wenran Jiang
Advisor, Institute for Peace & Diplomacy | READ
While his Beijing visit marked a diplomatic “Pierre Trudeau moment” in resetting Canada-China relations, it was the Davos address that truly elevated Carney to the stature of a statesman, offering a vision transcending the short-term political calculus that paralyses Western capitals. […]
This is not about building fortresses, but about nurturing a “dense web of connections” that reduces vulnerability to coercion and creates genuine strategic autonomy. In a Western political landscape fixated on placating power and the next election cycle, Carney’s call for honesty and collective action is revolutionary.
Yet, the true test of Carney’s doctrine lies ahead. The doctrine of “values-based realism” will face immediate stress tests, particularly when Canada’s principles conflict with the actions of its closest ally.
The Word in China
Xu Xin
Vice Dean, School of Trade Negotiations, Shanghai University of International Business and Economics | READ
Canada’s optimization of market access conditions will enable local consumers to access a wider range of high-quality EV products and accelerate the transition toward clean transportation. Simultaneously, it offers Chinese EV enterprises broader space for international cooperation. This collaboration is not merely one-sided market entry, but rather complementarity and integration across industrial chains, helping to promote in-depth cooperation between both sides in EV trade and investment.
[…] China and Canada still have broad scope for cooperation in fields including the green economy, digital economy, and technological innovation. The outcomes of this consultation have injected new momentum into bilateral relations and sent a positive signal to the international community: open cooperation and mutual benefit remain the mainstream of international economic and trade relations.
Liu Jiangyun
Adjunct Researcher, Centre for Canadian Studies, Guangdong University of Foreign Studies | READ
With Trump arbitrarily undermining trade rules, what Carney is doing is accelerating the promotion of trade diversification to reduce dependence on the United States, thereby minimizing Canada’s losses.
[…] From a tactical perspective: first, Canada has powerful automotive industry unions, and Sino-Canadian joint ventures may face friction in management styles; second, if electric vehicles produced through joint ventures are restricted from using Chinese software solutions, Chinese automakers would be unable to leverage their advantages in intelligent cockpits and assisted driving, significantly diminishing product competitiveness; third, the Canadian and U.S. automotive parts supply chains are deeply integrated, and it remains to be seen whether joint ventures can overcome political interference and stably obtain the necessary components.
Lü Xiang
Research Fellow, Center for World Politics, Chinese Academy of Social Sciences | READ
Canada is facing unprecedented security pressure from its neighbour, which forces it to consider how to balance its relations with major powers, rather than adopting a one-sided strategy like the previous government. Maintaining relations with major powers has become an urgent, even existential strategic task, because threats from the neighbouring country could translate into action at any time. This is a severe test for Canada. […]
Of course, as a neighbour of the United States, Canada cannot completely escape U.S. influence. This is a reality Carney must face regardless of how firm or independently minded he may be. However, we believe he will do his utmost to build a resilient and somewhat independent foreign policy for Canada. We welcome Canada’s pursuit of strategic autonomy, even though it faces numerous difficulties and even existential threats. In any case, he is making active efforts, and this deserves encouragement.
What’s next below the paywall:
Peng Bo: Research Fellow, Chinese Academy of International Trade and Economic Cooperation
Bao Jianyun: Dean and Professor, Department of International Politics, School of International Studies, Renmin University
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