California board chair lauds Canada-China EV trade deal

California Air Resources Board (CARB) Chair Lauren Sanchez publicly lauded Canada’s trade deal with China that allows the import of up to 49,000 electric vehicles (EVs) at a substantially reduced 6.1% rate. At a 27 January BloombergNEF summit in San Francisco, Sanchez described the arrangement as a boon for global efforts to phase out internal combustion engines (ICE) and highlighting the growing isolation of Trump administration climate policy. 

Sanchez said she was “excited to see what unfolds in Canada” following Prime Minister Mark Carney’s agreement with Beijing, adding that the move “only reinforces that the Trump administration is going it alone” on EV policy.

During her remarks, Sanchez also characterised the sudden decline in US EV sales during Q4 2025 as a direct result of the Trump administration’s “targeted attacks” on EVs, most prominently his elimination of the decade-old US$7,500 federal tax incentive. This contributed to plummeting consumer demand, which did not translate into ICE sales but has encouraged a growing interest in hybrid alternatives. 

In lieu of federal EV support, California is proceeding with a US$200m state investment to maintain consumer incentives and preserve the state’s position as the US’ largest vehicle market. Meanwhile, the Trump administration has made persistent efforts, largely successfully, to strip CARB of emissions regulatory authority and rolled back stringent fuel economy standards intended to wean participating states off of fossil fuel dependency. State Governor Gabin Newsom has vowed a legal battle to undo the rollback.

When asked whether US consumers might soon access vehicles from BYD—the Chinese automaker that recently displaced Tesla as the world’s largest EV seller despite little to no presence in North America—Sanchez highlighted that the regulatory jurisdiction falls outside her purview but noted “perhaps there might be some in Vancouver”. Her remarks implicitly acknowledged that proximity to Canada’s major western city could provide US consumers with indirect access to Chinese EV denied entry through direct importation, a scenario precisely matching the industry fears that prompted swift political reaction from Washington.

Previously Canada had aligned with the US in charging a 100% surtax on Chinese EV imports; the reduced 6.1% rate is in exchange for cuts on canola tariffs, a key Canadian export. The arrangement represents a major departure from the US-aligned foreign policy doctrine historically practiced by Canada, and sent shockwaves through the North American automotive industry upon its announcement.

The pushback has already bubbled to the surface in Canada: Ontario Premier Doug Ford, flanked by Canadian trade union Unifor President Lana Payne and various industry executives, urged a consumer boycott of Chinese-made EVs at a press event on 21 January. Ford implored consumers to “support companies that are building vehicles here” rather than rely on Chinese state-subsidised alternatives made with lower labour costs.

US President Donald Trump, for his part, has interpreted the Canada-China deal as a sort of mutiny, threatening fresh 100% tariffs on all US-bound Canadian exports if Ottawa finalises its deal with China. “If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump wrote on social media. It should be noted that Trump continues to refer to Carney as Governor in reference to his previous threats to make Canada the 51st US state.

Carney triggered shockwaves a second time when he suggested during his remarks at the recent Davos summit that US-led global hegemony—and the economic security that comes part and parcel—was coming to an end. US Treasury Secretary Scott Bessent suggested days later that the Canadian leader had walked back his remarks during a 26 January call with President Trump. This triggered the swift rebuttal: “I meant what I said in Davos”. Carney said the call was about discussing “what Canada is doing positively to build new partnerships around the world”.