Trump supports Canada’s Chinese EV import cap arrangement, Carney says

Investing.com -- President Donald Trump expressed approval of Canada's agreement with China that limits Chinese electric vehicle imports through a quota system with reduced tariffs, Canadian Prime Minister Mark Carney said Wednesday at the Group of Seven leaders summit in Evian, France.

The arrangement, announced during Carney's January visit to Beijing, permits up to 49,000 Chinese EVs to enter Canada over a 12-month period at approximately 6% tariff, with the quota set to increase gradually. Canada previously imposed tariffs exceeding 100% on these vehicles.

"He likes the structure, actually," Carney told reporters Wednesday. "We had a follow-up conversation."

A microphone captured Carney discussing the China agreement with Trump on Tuesday, explaining the cap on imported vehicles. "I thought you'd actually like that," Carney was heard saying, with Trump responding "that's good."

Carney said Wednesday that Trump raised the topic during their conversation.

The two leaders did not hold a formal bilateral meeting at the G7, though Carney said they spoke on various topics throughout the summit.

Members of Trump's administration have criticized Canada's deal with China. The United States maintains its 100% tariff on Chinese EVs and is implementing a software ban on the vehicles citing national security reasons.

The agreement remains a point of tension as Canada works to reduce Trump's tariffs on foreign-built cars.

Canadian minister Dominic LeBlanc, who leads the tariff negotiations, met with US Trade Representative Jamieson Greer at the summit Tuesday. LeBlanc called it a "constructive meeting" but did not specify whether progress was made on tariff reductions.

Canadian Industry Minister Melanie Joly is in China this week meeting with Chinese automakers. The Canadian government seeks joint ventures between Chinese and Canadian companies to manufacture EVs in Canada.

Carney said Wednesday the deal "creates the possibility — possibility, not the certainty in any way — that this commercial relationship develops, and there's Chinese investment in Canada."

He added that any investment must involve "material Canadian production" and that the government would not accept knockdown kits, where vehicles are mostly assembled in China and shipped abroad for final assembly.

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