What Canadian and Mexican EV Imports From China Mean for the United States | Council on Foreign Relations

Negotiations to review the USMCA are slated to begin this summer and could result in a less-integrated North American auto sector. Trump seems bent on drawing production from Canada and Mexico to the United States. Auto company General Motors’ June 2025 announcement that it would move some production of the Chevrolet Blazer and Equinox vehicles from Mexico to several states in the United States, for instance, was hailed as a triumph for Trump’s trade policy. The administration will presumably press its North American partners to make such moves more likely under the USMCA. 

If Trump takes a hard line, Canada and Mexico might respond by drawing closer to China. Chinese EVs’ appeal to consumers—especially at the low end of the market—as well as their potential to reduce pollution, provide further impetus. Chinese manufacturing investments would undoubtedly be a significant part of any such deal, as Carney’s announcement suggests. However, whether either country would risk its relationship with the United States in this fashion or gain leverage to blunt USMCA revisions that the Trump administration wants is an open question. U.S. Transportation Secretary Sean Duffy, hinting at the stakes of the upcoming talks, said Canada would “regret” bringing Chinese EVs into its market. 

Alternatively, Trump might strike his own deal with China, following through on a January 2025 speech to the Detroit Economic Club when he said, “Let China come in.” Such an approach would be a new chapter in an old story, following European, Japanese, and Korean auto firms that established production in the United States over the past forty years. At the same time, it would confound national security hawks and economic nationalists who strongly back the current exclusion, not to mention climate hawks who have seen Trump eviscerate his predecessor’s EV strategy. It would also further complicate USMCA negotiations, potentially undercutting Canadian and Mexican efforts to establish closer ties with China and leave them more dependent on the United States. 

Many more moves are still to be played in this complex game. Hundreds of billions of dollars of investment in the North American auto industry and supply chain over decades will not be unwound overnight. Voters, workers, and companies in all three countries, along with their leaders, will have their say. But it is possible that Carney’s deal to admit Chinese EVs into Canada will be seen in retrospect as the camel’s nose under the tent. The movements it triggers could leave the United States as an isolated, self-reliant island of internal combustion vehicles in an EV world led by China. 

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