Toronto, Canada – Amid growing concerns over unfair trade practices, Canada announced on Monday its decision to impose a 100% tariff on imports of electric vehicles manufactured in China. The move reflects similar actions taken by the United States to counter what Western governments deem as China’s unfair advantage due to government subsidies.
The announcement came following a meeting between U.S. national security advisor Jake Sullivan and Canadian Prime Minister Justin Trudeau and Cabinet ministers. The decision to implement the tariffs was influenced by Sullivan’s visit, as he prepares for his upcoming trip to Beijing.
In addition to the 100% tariff on Chinese-made electric vehicles, Canada also revealed plans to impose a 25% tariff on Chinese steel and aluminum. Trudeau emphasized that countries like China have been utilizing unfair practices to gain an edge in the global market.
One notable Chinese electric vehicle producer eyeing the Canadian market is BYD, which established a Canadian corporate entity last spring. The company aims to enter the Canadian market as early as next year, signaling a potential shift in the EV market landscape.
While China has yet to respond to Canada’s actions, Chinese officials are likely to address their concerns over American tariffs during Sullivan’s visit. President Joe Biden implemented significant tariffs on various Chinese goods, including electric vehicles, in an effort to address trade imbalances.
The United States believes that China’s subsidies provide Chinese companies an unfair advantage by eliminating the need to generate profits. This practice has enabled Chinese firms to offer electric vehicles at significantly lower prices than their competitors.
Deputy Prime Minister Chrystia Freeland highlighted Canada’s intent to further explore tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals, and solar panels through a 30-day consultation. The move aims to protect Canada’s EV sector from potential harm caused by China’s overcapacity and oversupply strategy.
As Canada aligns its trade policies with other economies, concerns arise about potential retaliation from China in other industries. Former Canadian ambassador to China, Guy Saint-Jacques, warns of possible retaliation in sectors such as barley and pork. Saint-Jacques cautions that China may seek to send a strong message in response to Canada’s actions.
Overall, Canada’s decision to implement tariffs on Chinese imports underscores the country’s commitment to fair trade practices and protecting its domestic industries from unfair competition. As global economies navigate complex trade relations, the impact of such decisions on the EV market and beyond remains to be seen.