TORONTO — Canada’s government is imposing a 100% tariff on imports of Chinese-made electric vehicles that matches U.S. tariffs.
Prime Minister Justin Trudeau also announced Monday there will be a 25% tariff on Chinese steel and aluminum.
“Actors like China have chosen to give themselves an unfair advantage in the global marketplace,” Trudeau said at a cabinet retreat in Halifax, Nova Scotia.
Trudeau’s government began 30-day consultation on the issue earlier this summer to counter what Deputy Prime Minister Chrystia Freeland has said is a clear effort by Chinese companies to generate a global oversupply.
Canada’s move comes weeks after both the United States and the European Commission announced plans to impose higher import tariffs on Chinese EVs.
U.S. national security advisor Jake Sullivan encouraged Canada to do the same during a meeting with Trudeau and cabinet minister at a cabinet retreat in Halifax, Nova Scotia on Sunday.
Right now the only Chinese-made EVs imported into Canada are from Tesla, made at the company’s Shanghai factory. There are no Chinese-branded EVs sold or imported at the moment.
Freeland has said Canada will act in concert with its allies in the United States and the European Union as North America has an integrated auto sector. Freeland has said her government would ensure Canada doesn’t become a dumping ground for Chinese oversupply.
U.S. President Joe Biden has said Chinese government subsidies for EVs and other consumer goods ensure that Chinese companies don’t have to turn a profit, giving them an unfair advantage in global trade.
Chinese firms can sell EVs for as little as $12,000. China’s solar cell plants and steel and aluminum mills have enough capacity to meet much of the world’s demand, with Chinese officials arguing their production keeps prices low and would aid a transition to the green economy.
Canada has recently announced a significant move in the ongoing trade tensions with China by imposing a 100% tariff on Chinese-made electric vehicles. This decision comes as part of Canada’s efforts to protect its domestic electric vehicle industry and address concerns about unfair trade practices.
The Canadian government has cited concerns about the impact of Chinese electric vehicles on the domestic market, including potential job losses and the erosion of Canada’s competitive edge in the growing electric vehicle sector. By imposing a 100% tariff on Chinese-made electric vehicles, Canada aims to level the playing field for domestic manufacturers and ensure that they can compete fairly in the market.
This move is likely to have significant implications for both Canadian consumers and the electric vehicle industry as a whole. On one hand, the tariff could lead to higher prices for Chinese-made electric vehicles, making them less competitive in the Canadian market. This could potentially drive consumers towards domestic or other foreign-made electric vehicles, boosting sales for Canadian manufacturers.
However, the tariff could also have negative consequences for Canadian consumers who are looking to purchase affordable electric vehicles. With Chinese-made electric vehicles becoming more expensive due to the tariff, some consumers may be priced out of the market or forced to consider alternative options.
In addition, the tariff could strain diplomatic relations between Canada and China, as it is likely to be seen as a retaliatory measure in response to China’s own trade policies. This could have broader implications for trade relations between the two countries and potentially impact other industries beyond electric vehicles.
Overall, Canada’s decision to impose a 100% tariff on Chinese-made electric vehicles reflects the government’s commitment to protecting domestic industries and ensuring fair competition in the market. However, it also raises questions about the potential impact on consumers, the electric vehicle industry, and international trade relations. Only time will tell how this move will play out and what the long-term consequences will be for all parties involved.
