General Motors $GM ( ▼ 1.71% ) CEO Mary Barra is sounding the alarm over Canada’s move to lower the tariff rate on Chinese EVs, calling it a “slippery slope.”
The details: During a meeting with employees Tuesday, Barra took direct aim at Canada’s new auto trade deal with China as a threat to the North American auto industry, reports The Wall Street Journal.
The CEO said the move jeopardizes efforts to build a strong industrial base in the region and protect jobs in North America.
Barra also noted that Chinese automakers benefit in China from high tariffs imposed on importers and technology restrictions that keep others from entering their market.
“I can’t explain why the decision was made in Canada,” Barra said during the meeting with employees, per WJS. “It becomes a very slippery slope.”
Why it matters: For dealers, cheaper Chinese EVs in Canada could reshape pricing pressure and inventory mix across the border and any U.S. response (including tariffs or tighter trade rules) can ripple into allocations, incentives, and the cost structure for North American-built vehicles and parts.
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Between the lines: Carney, who struck Canada’s new deal with China, has defended the move to President Donald Trump amid the threat of 100% U.S. tariffs, stressing the importance of "building partnerships abroad ... (and) building at home,” reports Reuters.
Under the new Canada-China pact, Canada will reduce tariff rates on Chinese EV imports to Canada from 100% to 6.1%.
The deal applies to EVs priced at $33,000 or less and is capped at 49,000 vehicles in year one, expanding to 70,000 by year five.
Digging Deeper: The tension over Carney’s move to ease tariffs on Chinese EV imports (from the White House to Detroit executive suites) adds to concerns about the future of the United States-Mexico-Canada Agreement (USMCA).
President Trump has previously said he might let the free-trade deal expire, recently calling it “irrelevant.”
Prime Minister Carney has continued to stress the importance of USMCA, even as he seeks to expand Canada’s trade.
Major automakers, including GM, have urged the Trump administration to extend USMCA, given its significance to American auto production.
What they’re saying: "Our supply chains go all the way through all three countries. It's not simple. It's very complex,” said Mark Reuss, president of GM (via Reuters). “The whole North American piece of that is a big strength."
Looking ahead: If this deal between Canada and China weakens the upcoming USMCA review, the center of gravity in North American auto shifts.
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