Former Prime Minister Justin Trudeau has warned that American tariffs on Canadian automakers are creating economic pressures that could lead to increased collaboration with China in the automotive industry.

Echoes of Bombardier

Trudeau recounted a previous instance where similar economic pressures nearly resulted in Canadian company Bombardier falling under Chinese influence. During the development of Bombardier’s C-Series jets, Boeing and Airbus actively discouraged potential customers from placing orders, creating significant financial difficulties for the company.

China's Offer

Trudeau described China as arriving with a ‘dump truck full of money’ ready to rescue the struggling aerospace manufacturer. He emphasized that the actions of Boeing and Airbus, intended to eliminate a competitor, almost resulted in Canada becoming overly reliant on China in a strategically important industry.

G7 Intervention

Trudeau explained that he raised the issue directly with then-U.S. President Donald Trump, alongside French President Emmanuel Macron and German Chancellor Angela Merkel at the 2017 G7 summit in Italy. He argued that the aggressive competition ultimately benefited a country operating under a different set of principles.

Airbus Acquisition

Following those discussions, Airbus ultimately acquired a majority stake in the C-Series program, a development Trudeau directly linked to the conversations held at the G7 summit. He believes this outcome demonstrated the potential for collaborative solutions.

Current Auto Tariffs

Trudeau now sees a parallel situation unfolding with the current tariffs imposed by the Trump administration on Canadian automakers. He contends that these tariffs are forcing Canada to actively explore closer collaborations with China in the automotive sector.

Trade Landscape

This shift, he warns, is not a desired outcome but a direct consequence of the protectionist measures implemented by the United States. Canada has already taken steps to address concerns about unfair trade practices, mirroring the U.S. by imposing a 100 percent tariff on Chinese-made electric vehicles in 2024.

Recent Negotiations

Recent negotiations led by Prime Minister Mark Carney resulted in tariff relief for Canadian agricultural sectors following a meeting with Chinese President Xi Jinping, allowing for the import of up to 49,000 Chinese EVs at a reduced tariff rate of 6.1 percent.

Warning on Protectionism

Trudeau’s overarching message is that protectionist policies and aggressive competition among allies create vulnerabilities that are readily exploited by nations with different priorities. He believes the current trajectory is pushing Canada towards seeking economic alternatives in China, a development he views as detrimental to long-term strategic interests.