The trade war between the United States and Canada risks handing victory to President Xi Jinping of China. Xi already holds monopoly power over critical components like rare-earth magnets and semiconductors. His April 2025 restrictions temporarily shut down a Ford Explorer plant in Chicago and halted Honda production of Civics and CR-Vs in Ontario. Instead of uniting against Chinese economic coercion, President Trump frames the dispute as a fight over how much manufacturing Canada should yield to the U.S. Prime Minister Mark Carney rejected Trump's latest offer and escalated with fresh tariffs. Former Deputy Prime Minister Chrystia Freeland called it a bad deal for the United States.

Washington needs a resilient Canadian manufacturing sector to counter Chinese market dominance. High tariffs on Canadian cars, steel, and aluminum will eventually drive Americans to stop buying Canadian-assembled vehicles, devastating Canada's auto industry. Canada cannot pivot to Asia or Europe due to distance. Australia offers a warning: after its automakers closed by 2017, Chinese vehicles captured nearly one in three new car sales by 2026, up from one in 250. Canada has already allowed 49,000 Chinese electric vehicles, a number likely to grow. If Canadian manufacturing disappears, consumers will choose cheaper Chinese imports over higher-cost U.S. vehicles, hurting American automakers who rely on scale to lower costs.