Conservative leader Pierre Poilievre has stressed the importance of maintaining strong trade relations with the United States, warning that distancing Canada from Washington in favor of closer ties with China could discourage foreign investment particularly in the country’s automotive sector.
In a message posted on social media on Feb. 28, Poilievre pointed to Japan’s stance on trade with Canada, arguing that the country’s access to the American market is a major factor for international investors. He said Japanese automakers would be unlikely to increase investments in Canada if Ottawa undermines its trade relationship with the United States in favor of Beijing.
“Our auto industry benefits from a free-trade agreement with the U.S., and that serves the interests of Canadian workers and the national economy,” Poilievre said.
His remarks followed comments by Kanji Yamanouchi, who recently highlighted the significance of the United States–Mexico–Canada Agreement (USMCA) for Japanese companies operating in Canada. During an interview with CTV News aired on March 1, Yamanouchi described continued access to the U.S. market as a “critical condition” for sustaining or expanding Japanese investment in Canadian auto manufacturing.
Yamanouchi noted that although Canada has a large economy valued at about $2.5 trillion it is still far smaller than the United States’ roughly $30 trillion market. According to him, many vehicles produced in Canada are not only sold domestically but also exported to the United States, making American market access essential for manufacturers’ profitability calculations.
The ambassador’s comments come ahead of a scheduled review of the USMCA agreement beginning July 1. If all three member countries—Canada, the United States, and Mexico—agree to renew the deal, it could remain in force until 2032. However, failure to reach a renewal agreement could trigger yearly reviews of the pact. In the event that a country withdraws entirely, the remaining nations could pursue separate bilateral trade agreements.
Canada’s Minister of International Trade, Dominic LeBlanc, said he remains optimistic that negotiations will lead to the continuation of the trilateral agreement. Speaking on Feb. 26, LeBlanc emphasized that stable free trade is in the economic interest of all three countries.
He also referenced a Feb. 20 decision by the Supreme Court of the United States that struck down tariffs imposed under the International Emergency Economic Powers Act by Donald Trump. While Washington later introduced new global tariffs of 10 percent starting Feb. 24, the United States pledged to continue exempting USMCA partners provided rules-of-origin requirements are met.
Despite those assurances, trade tensions remain. Last year the United States imposed a 25 percent tariff on Canadian vehicles and automotive components. Trump has repeatedly said the U.S. should increase domestic manufacturing and reduce reliance on imported cars, stating in January that the country does not need vehicles produced in Canada or Mexico.
Industry leaders have warned that such measures could severely affect Canada’s auto sector. Brian Kingston told a parliamentary committee in October that roughly 90 percent of Canadian auto production is exported to the United States, making uninterrupted market access essential for the industry’s survival.
The debate over trade also intensified after Prime Minister Mark Carney visited China in mid-January and reached an agreement to reduce tariffs on Chinese electric vehicles entering Canada. Under the arrangement, tariffs will drop from 100 percent to the most-favoured-nation rate of 6.1 percent for up to 49,000 vehicles during the first year. The quota is expected to gradually increase to around 70,000 units within five years, with hopes that the move will encourage Chinese investment in Canada’s automotive sector.
The deal drew criticism from Washington. Trump warned that if Canada pursued deeper trade arrangements with Beijing, the United States could respond with tariffs of up to 100 percent on Canadian exports.
Carney has since clarified that Canada is not seeking a free-trade agreement with China but is instead addressing existing trade issues between the two countries.
The Canadian prime minister is scheduled to travel to Japan this week, where he will meet with Sanae Takaichi. Discussions are expected to focus on cooperation in energy, critical minerals, food security, and defense collaboration in the Indo-Pacific region.
