The US House of Representatives’ bipartisan select committee focused on China warned that Canada’s decision to slash tariffs on Chinese EVs will expose North America to what it called China’s “state-subsidized overcapacity.”
The panel, led by Republicans since its creation in 2023, aims to highlight what lawmakers see as a sweeping set of security and economic challenges posed by the United States’ top geopolitical rival.
The China-focused House committee claimed on X that the same forces “distorted Europe’s auto industry,” with North America risking being next.
“China’s state-subsidized overcapacity has already distorted Europe’s auto industry, and North America will be next if this precedent stands,” the committee said in a post on X on Saturday.
Chairman John Moolenaar (R-Michigan) has made Chinese automotive competition a particular focus.
The committee said Canada’s decision “risks giving Beijing a foothold in the North American auto market, threatening thousands of jobs and undermining a century of integrated automotive leadership.”
It called on Ottawa to “reconsider and work with the United States and Mexico to strengthen, not weaken, North American industry” at what it described as a critical moment for USMCA renewal negotiations.
Tariff Deal
The criticism follows Canadian Prime Minister Mark Carney’s visit to Beijing last week, where he signed a trade agreement with Chinese President Xi Jinping allowing up to 49,000 Chinese EVs into Canada annually at a 6.1% tariff rate.
Since 2024, all imported electric vehicles from China faced a 100% tariff.
The deal has drawn sharp criticism from US officials.
Speaking at Ford‘s Ohio plant, Trade Representative Jamieson Greer called it “problematic for Canada” and predicted the country would regret it “in the long run.”
President Donald Trump, however, endorsed the deal. “That’s OK, that’s what he should be doing,” he said Friday. “If you can get a deal with China you should do that.”
Ford-BYD Warning
The committee’s statement on Canada adds to its recent warnings about Chinese automakers gaining influence in North America.
Last week, Moolenaar criticised reports that Ford is pursuing a battery supply partnership with BYD for its hybrid vehicles.
“If reports that Ford is in discussions to potentially partner with a second Chinese battery company were to come true, it would diminish Ford’s status as an iconic American company,” Moolenaar said in a statement.
He warned that China “has already shown in recent months that it will weaponize the auto supply chain,” calling it “a serious vulnerability” that “would only get worse if Ford enters into a new partnership with BYD.”
“Ford should work with our nation’s allies, not our adversaries,” Moolenaar added.
Canada had aligned with that approach until last week’s deal with Beijing, which also included Chinese commitments to explore major auto investments in Canada.
Industry Minister Mélanie Joly met with BYD and Chery Automobile during the Beijing trip, Bloomberg reported, as Ottawa prepares a new automotive strategy that could allow Chinese companies to assemble vehicles in Canada for the first time.
In the longer term, Canada wants to export vehicles around the world and not rely on access to the US market.
