{"id":67502,"date":"2026-01-27T10:19:24","date_gmt":"2026-01-27T18:19:24","guid":{"rendered":"https:\/\/energi.media\/?p=67502"},"modified":"2026-01-27T10:19:24","modified_gmt":"2026-01-27T18:19:24","slug":"china-deal-india-talks-connect-carneys-trade-plans-with-worlds-first-2-electrostates","status":"publish","type":"post","link":"https:\/\/energi.media\/news\/china-deal-india-talks-connect-carneys-trade-plans-with-worlds-first-2-electrostates\/","title":{"rendered":"China Deal, India Talks Connect Carney\u2019s Trade Plans with World\u2019s First 2 Electrostates"},"content":{"rendered":"

This article was published by The Energy Mix<\/a> on Jan. 27, 2026.<\/em><\/p>\n

By Mitchell Beer<\/a><\/strong><\/em><\/p>\n

On the heels of a new strategic partnership with China, and with Prime Minister Mark Carney planning a trip to India later this year, the plan to reduce Canada\u2019s trade dependence on the United States is beginning to yield closer connections with the world\u2019s first two electrostates.<\/p>\n

As Trump\u00a0threatened<\/a>\u00a0a 100% tariff against Canadian products in response to a deal with China that he\u00a0initially praised<\/a>, at least one Chinese electric vehicle manufacturer looked to be preparing for an expansion into Canada, while a federal official said Canada wanted to be the first country in North America to build an EV with\u00a0Chinese know-how<\/a>.<\/p>\n

Meanwhile, just as China is receiving wide recognition as the world\u2019s first electrostate, a small flurry of news and analysis had India rapidly emerging as the second, advancing farther and faster than China did when it had achieved the same degree of economic development.<\/p>\n

\u2018Foreign Troubles\u2019 for U.S. Automakers<\/h2>\n

In their strategic partnership\u00a0announced<\/a>\u00a0Jan. 16, Canada agreed to sharply reduce tariffs on electric vehicle imports from China, while China offered up tariff relief for Canadian canola, peas, pork, and seafood. Canada will slash duties on up to 49,000 Chinese EVs per year, rising to 70,000 by 2031, to a \u201cmost-favoured-nation tariff rate\u201d of 6.1%. Within five years, as well, more than half of those vehicles are meant to be affordable EVs with an import price of less than $35,000.<\/p>\n

At the time, CBC\u00a0said<\/a>\u00a0Ottawa would soon release a strategy to expand the auto sector and \u201cleapfrog\u201d the U.S., with \u201cpreferential access to foreign automakers that manufacture vehicles in Canada.\u201d<\/p>\n

Scarcely a week later, the New York Times\u00a0reported<\/a>\u00a0that the U.S. industry\u2019s \u201cforeign troubles\u201d now extend to Canada, after U.S. trade policy \u201cdevastated the Canadian auto industry and pushed the country to reach an agreement that will make it easier for Chinese companies to sell cars there.\u201d That could make the Canada-China agreement \u201can ominous development for U.S. automakers that are already struggling to stay relevant outside North America,\u201d the Times wrote.<\/p>\n

\u201cGeneral Motors and Ford Motor\u2014the two largest U.S.-based car manufacturers\u2014have been steadily losing customers in Asia, Europe, and Latin America, as Chinese carmakers have gained ground,\u201d the news story stated. \u201cIf they lose significant ground to Chinese companies in Canada, Mexico, and other countries where they once dominated, Ford and GM could gradually become niche manufacturers.\u201d<\/p>\n

\u201cThere\u2019s a real danger that the market for U.S. carmakers is going to largely be the U.S., and only that part of the U.S. market that wants big SUVs and trucks,\u201d Erik Gordon, a professor at the University of Michigan\u2019s Ross School of Business, told Times auto industry reporter Jack Ewing.<\/p>\n

\u201cHistorically, U.S. trade policy regarding automotive has been mirrored in Canada,\u201d\u00a0added<\/a>\u00a0George Washington University engineering professor John Helveston, in an interview with the South China Morning Post. But now, \u201cCanada is realizing that the U.S. industry is perhaps not the only one to be tied to,\u201d a measure of both the impact of Trump\u2019s tariff wars and the wider decline of U.S. leadership.<\/p>\n

In Canada, the partnership has analysts arguing that lower costs will help consumers, although\u00a0concerns<\/a>\u00a0about supply chains, industrial strategy, environmental impacts, and \u201cstrategic dependence\u201d have yet to be resolved.<\/p>\n

\u201cThe quota is too small to translate into a cheap-car bonanza for Canadian car shoppers,\u201d the Globe and Mail\u00a0writes<\/a>. \u201cBut it is likely to increase competition among automakers, in China and elsewhere, to make $35,000 EVs fit for the Canadian market.\u201d<\/p>\n

The first imports will likely come from western automakers with Chinese production lines, notably\u00a0Chinese-owned<\/a>\u00a0Volvo, Buick, and Elon Musk\u2019s Tesla, the Globe says. But \u201cChina\u2019s own brands won\u2019t take long to show up in Canada,\u201d the news story states, citing Canadian Black Book senior manager Daniel Ross, and they\u2019ll want to build their profile \u201cby focusing on models that meet North American expectations in terms of features, style, and size.\u201d That will put them in competition \u201cwith compact and subcompact SUV segments, which, together, currently make up about half of the Canadian market.\u201d<\/p>\n

Late last week, the Globe\u00a0reported<\/a>\u00a0that China\u2019s Chery Automobile Co. Ltd. was laying the groundwork for a Canadian sales network, with at least three auto industry veterans saying they\u2019d been contacted by recruiters who indicated they were working for Chery. The company is also considering building cars in a UK plant owned by Jaguar Land Rover, the Financial Times\u00a0writes<\/a>.<\/p>\n

The Globe also\u00a0reports<\/a>\u00a0on the difficulties that Chinese manufacturer BYD ran into when it tried to set up manufacturing operations in Ontario a few years ago.<\/p>\n

The Two Electrostates<\/h2>\n

The trade deal earlier this month is just one part of an economic diversification strategy that had Carney concluding deals with the United Arab Emirates and Qatar over the last month. With International Trade Minister Maninder Sidhu now\u00a0calling<\/a>\u00a0for closer trade ties between Canada and India, Carney is planning a visit\u00a0as soon as March<\/a>, Reuters reported in an exclusive this week, with indications of trade talks in Brazil and Australia later this year.<\/p>\n

For a few years, China has been seen as the\u00a0world\u2019s first electrostate<\/a>, with renewable energy and energy storage\u00a0investments<\/a>\u00a0that\u00a0far exceed<\/a>\u00a0the activity in any other country. Earlier this month, Carbon Brief\u00a0talked to<\/a>\u00a0nearly a dozen leading experts in Chinese energy and climate policy to get a sense of what to expect in 2026\u2014the year when the country will publish a set of five-year targets that \u201ccould boost\u2014or moderate \u2013the pace of its energy transition.\u201d<\/p>\n

For more than 18 months, analysis by Carbon Brief and others has shown China\u2019s carbon dioxide emissions either flat or falling. This year, new non-binding emission targets and an expanded carbon market are expected to take effect, even as extreme weather increases the importance of climate adaptation \u201cwhile also adding to the challenge of advancing clean energy.\u201d<\/p>\n

Already, though, renewable energy has already\u00a0replaced<\/a>\u00a0natural gas as \u201cthe leading replacement for coal demand in China, with growth in solar and wind generation largely keeping emissions growth from China\u2019s power sector flat,\u201d Carbon Brief\u00a0reports<\/a>. Nikkei Asia\u00a0says<\/a>\u00a0China installed three times more battery storage capacity than the U.S. in 2025.<\/p>\n

Now India is \u201celectrifying faster and using fewer fossil fuels per capita than China did when it was at similar levels of economic development,\u201d Bloomberg\u00a0says<\/a>, citing analysis by the UK\u2019s Ember energy think tank. \u201cIt\u2019s a sign that clean electricity could be the most direct way to boost growth for other developing economies, too.\u201d<\/p>\n

The government of Prime Minister Narendra Modi \u201cis considering new plans that would\u00a0double India\u2019s coal power capacity<\/a>\u00a0by 2047, and the country\u2019s oil consumption\u00a0growth was set to outpace<\/a>\u00a0China\u2019s last year,\u201d Bloomberg writes. \u201cBut the South Asian economy\u2019s coal and oil consumption per capita is a fraction of what China\u2019s was at similar income levels. In absolute terms, India\u2019s fossil fuel consumption is growing at slower rates than China\u2019s today.\u201d<\/p>\n

No More Engine for Oil and Gas Growth<\/h2>\n

Energi Media publisher Markham Hislop says the Ember analysis has wider implications.<\/p>\n

\u201cIt suggests that India, the country long assumed to be the last great engine of global oil and gas demand growth, may already be bending away from fossil fuels faster than China did at a comparable stage of development,\u201d Hislop\u00a0writes<\/a>. \u201cThat version of India\u2019s energy future undermines the strategic assumptions underpinning energy policy in exporting nations from the Middle East to North America, including Canada.\u201d<\/p>\n

The driving force behind that shift is \u201csimple and structural,\u201d he adds, citing Ember. \u201cChina had to pioneer modern electric technologies at scale. India does not. It is industrializing at a moment when solar panels, batteries, and electric vehicles are abundant, cheap, and improving every year. India is not taking a fossil detour because it no longer makes economic sense to do so.\u201d<\/p>\n

Which in turn leads Hislop to the implications for fossil fuel exporters. \u201cIf India\u2019s oil and gas demand really is nearing a peak, or never reaches the levels long assumed, the implications ripple outward.,\u201d Hislop says. \u201cFor global markets. For geopolitics. And for countries like Canada that have built their long-term energy ambitions on the idea that someone, somewhere, will always need more hydrocarbons.\u201d<\/p>\n

In his Electrotech Revolution newsletter, Ember strategist and report co-author Kingsmill Bond\u00a0cites<\/a>\u00a0faster solar deployment, much lower per capita coal use, rapid growth of electric vehicles, much lower oil demand in transport, and a \u201csimilar rapid electrification pathway\u201d as factors that could make India\u2019s \u201celectrotech fast-track\u201d more effective than China\u2019s \u201cfossil detour\u201d en route to electrostate status.<\/p>\n

\u201cThis energy path avoids deep fossil fuel dependency while positioning the country to supply electrotech to the world,\u201d he writes, in what amounts to a \u201cnew path for emerging economies. India is showing other countries how to take a cheaper, faster, cleaner pathway to the electrotech future.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

This article was published by The Energy Mix on Jan. 27, 2026. By Mitchell Beer On the heels of a new strategic partnership with China, and with Prime Minister Mark Carney planning a trip to [Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":67503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[1],"tags":[322,13,2929,91,3039,597,584],"class_list":{"0":"post-67502","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-business","9":"tag-canada","10":"tag-carney","11":"tag-china","12":"tag-electrostates","13":"tag-trade","14":"tag-trump"},"acf":[],"yoast_head":"\nIndia - Thoughtful Journalism About Energy's Future<\/title>\n<meta name=\"description\" content=\"On the heels of a new strategic partnership with China, and with Prime Minister Mark Carney planning a trip to India later this year.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energi.media\/news\/china-deal-india-talks-connect-carneys-trade-plans-with-worlds-first-2-electrostates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"India - 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