Let the Chinese cars in

It might come as a surprise that I’m writing a post advocating that the United States allow Chinese cars to be sold here. First of all, it’s well known that I view China as both an economic and a geopolitical threat to the U.S.; I’ve repeatedly praised the U.S. export controls that stop China from buying American chips and chipmaking equipment. I’ve urged Europe to use trade barriers to make sure that sudden waves of subsidized Chinese goods don’t forcibly deindustrialize its economy. And when it comes to tariffs, I’ve argued that targeted tariffs on final consumption goods (e.g. cars) are less economically harmful and more effective than other kinds of tariffs.

Given all of that, you wouldn’t think I’d write a post saying “America should buy Chinese cars after all.” Yet here we are.

This post was precipitated by Canada’s decision to almost completely eliminate tariffs on Chinese-made EVs, as part of a trade deal:

Under the arrangement, Canada will slash its tariff, currently 100%, to 6.1%, and allow Chinese electric vehicle imports of 49,000 units, rising to 70,000 over five years. Half of the annual quota is slotted for EVs costing less than CA$35,000. Beijing will also make a “considerable investment” in Canada’s auto sector over the next three years, Mr. Carney said. In return, China will slash its tariff on canola seed, one of Canada’s most important agricultural exports, from roughly 84 percent to about 15 percent.

This is not part of a general free trade deal between China and Canada — it’s a targeted agreement. But politically, it’s a big break between Canada and the U.S. Back in 2024, when Biden imposed 100% tariffs on Chinese EVs, Canada followed suit — no doubt worried about losing its crucial American markets and displeasing its indispensable ally.

Now, with Trump constantly threatening steep tariffs on Canada, relations between the two countries generally deteriorating, and U.S. auto investment in China in a long secular decline, Canada’s leaders don’t see as much downside from breaking with the U.S. policy line. (The move might even serve as a signal that if Trump starts threatening Canada the way he’s been threatening Greenland, Canada could geopolitically reorient toward China for protection.)

This is another illustration of how Trump’s bullying tactics often produce unintended consequences. But in fact, Canada’s move is one the U.S. should copy