Canada’s Chinese EV Gamble Puts Detroit’s Canadian Plants on the Chopping Block

The same auto industry lobby that represents GM, Stellantis, and Ford in Canada just told Prime Minister Mark Carney his Chinese EV deal is making an already brutal US trade negotiation worse. Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers’ Association (CVMA), made the comments at the Canadian International Auto Show in Toronto this week, Bloomberg reports. His warning landed harder than any press release could: Canada is picking a fight with Washington at the worst possible time.

Here’s the situation in three lines:

• The Fact: Canada’s January deal allows up to 49,000 Chinese EVs annually at a 6.1% tariff rate, down from the 100% duty imposed in 2024. Kingston says this “further complicates what’s already become a very challenging discussion” with the US.
• The Delta: Mexico raised its tariffs on Chinese vehicles to 50% on January 1, 2026. Kingston pointed to Mexico’s reversal as evidence that allowing Chinese EVs in was a mistake Canada should learn from, not repeat.
• The Buyer Impact: If Trump follows through on his threat of 100% tariffs on all Canadian goods, every vehicle rolling off GM, Ford, and Stellantis assembly lines in Ontario could become unsellable in the US market overnight.

Kingston’s warning exposes the real cost of Canada’s trade pivot

The CVMA represents the three Detroit automakers that operate major assembly plants in Canada, producing vehicles primarily for the US market. Ontario’s auto sector alone employs over 90,000 workers and produced more than 1.3 million vehicles in 2024. Kingston’s concern is straightforward: allowing Chinese EVs into Canada gives Washington ammunition to treat Canadian-made vehicles as a back door for Chinese products.

“The Mexicans are advancing the discussions faster with the Americans,” Kingston said at the auto show. “They’ve taken the opposite approach. They did allow China in, but now they realize that was a mistake and they put their tariffs up on Chinese vehicles.”

He’s right about the timeline. Mexico raised tariffs on Chinese vehicles from 20% to 50% effective January 1, 2026, as part of a broader package covering 1,463 product categories. The move was widely seen as an effort to align with Washington ahead of the USMCA review, and it appears to be working. Kingston’s point is that Canada went the opposite direction at exactly the wrong moment.

Trump’s 100% tariff threat is the backdrop Kingston can’t ignore

President Trump threatened in late January to impose 100% tariffs on all Canadian goods if Ottawa finalizes its trade deal with China. He accused Carney of trying to make Canada a “Drop Off Port” for Chinese products headed to the US. Carney’s government insists it has no intention of pursuing a free trade agreement with China and that the deal is consistent with CUSMA obligations.

But Kingston’s comments suggest Detroit’s patience is running out. His group’s member companies have billions invested in Canadian manufacturing. GM alone cut Canadian jobs and ended BrightDrop EV production at its CAMI plant in Ingersoll while CEO Mary Barra described the Chinese EV deal as a threat to North American auto manufacturing during a January employee meeting, according to The Wall Street Journal.

David Adams, CEO of the Global Automakers of Canada, was even more direct. He said any Chinese-branded manufacturing in Canada “doesn’t make any sense” unless the US also reverses its policy and allows those vehicles into the American market. That’s not happening. US tariffs on Chinese EVs sit at 100%, and Washington shows zero interest in lowering them.

Canada’s Chinese EV plant fantasy meets economic reality

Industry Minister Mélanie Joly has floated the idea of attracting a Chinese automaker to build a plant in Canada that would export EVs globally. Kingston dismissed it as “highly unrealistic” because China already has massive excess manufacturing capacity. Why would a Chinese company spend billions building in Canada when it can produce vehicles cheaper at home?

The math doesn’t work. Chinese auto plants operated at just 50% capacity utilization in 2024. BYD and other manufacturers are desperate to export vehicles to absorb that overcapacity, not invest in expensive new facilities in high-cost markets. As EVXL reported in December, China’s EV exports surged 87% globally in November 2025, with manufacturers strategically redirecting volume around tariff walls.

Meanwhile, the news today tells the real story of where Chinese automakers want to build. BYD and Geely are among the finalists bidding to buy a Nissan-Mercedes-Benz plant in Mexico, according to CNBC. They’re looking south, not north.

The parts industry sees it differently

Not everyone shares Kingston’s alarm. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, called allowing Chinese cars into Canada “the central premise of what the future holds for the Canadian auto industry.” But he added a warning of his own to Chinese manufacturers: “This is not the global south where you dump product. If you want to be a partner and be a part of it, then you’re going to have to grind it out like everybody else.”

Kingston, for his part, expressed optimism that a US-Canada deal will eventually happen. “There’s no such thing as diversifying away from America,” he said. “So we will get an agreement and there will be an industry that continues to be integrated.”

EVXL’s Take

We’ve been tracking this collision for months. When EVXL covered the original Canada-China deal in January, we called it “the first crack in the unified North American wall against Chinese electric vehicles.” Kingston’s comments at the auto show confirm what we predicted: that crack is widening into a fracture that threatens the integrated auto industry both countries depend on.

The irony is thick. Detroit’s Big Three hold less than 5% of the global EV market while BYD alone controls roughly 22%. The companies Kingston represents are losing the global EV race and retreating from electrification commitments. GM and Ford have written off a combined $25.5 billion in EV-related charges. Yet they’re asking Canada to keep the door shut on the very competition that could force them to build better, cheaper electric vehicles.

Kingston is right that the timing is terrible. But he’s wrong about the solution. Mexico’s 50% tariff didn’t fix anything. It just pushed BYD to start bidding on Mexican factories instead. The same will happen in Canada eventually. Chinese automakers will find a way in, whether through tariff deals, local manufacturing, or USMCA renegotiation.

Watch the USMCA review this summer. If Trump uses Canada’s China deal as leverage to extract concessions on auto manufacturing rules of origin, every plant in Ontario becomes a bargaining chip. Kingston knows this. That’s why he’s talking.

Editorial Note: AI tools were used to assist with research and archive retrieval for this article. All reporting, analysis, and editorial perspectives are by Haye Kesteloo.