Canada announced on Monday that it will be imposing a 100% tariff on imports of Chinese-made electric vehicles, in response to what Western governments have deemed as unfair subsidies given to the Chinese industry. This move mirrors the tariffs imposed by the United States and comes after encouragement from U.S. national security advisor Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau and Cabinet ministers. Sullivan is set to visit Beijing on Tuesday, marking his first visit to the country.
In addition to the tariff on electric vehicles, Canada also announced a 25% tariff on Chinese steel and aluminum. Prime Minister Trudeau stated that countries like China have been giving themselves an unfair advantage in the global marketplace, prompting Canada to take action. While there was no immediate response from China, this move is likely to have significant implications for trade relations between the two countries.
Currently, the only Chinese-made electric vehicles imported into Canada are from Tesla, produced at the company’s Shanghai factory. However, Chinese EV giant BYD has established a Canadian corporate entity and expressed interest in entering the Canadian market as early as next year. This indicates a potential shift in the landscape of electric vehicle imports in Canada, with Chinese brands looking to make their mark in the market.
Chinese officials are expected to raise concerns about the American tariffs with Sullivan during his visit to Beijing. The U.S. has recently imposed tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum, and medical equipment. President Joe Biden has cited Chinese government subsidies for EVs and other consumer goods as giving Chinese companies an unfair advantage in global trade.
Trudeau emphasized the importance of a coordinated approach among economies facing similar challenges, stating that standing up against unfair practices is essential to prevent a race to the bottom. Deputy Prime Minister Chrystia Freeland announced that Canada will also launch a consultation about possible tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals, and solar panels. This further demonstrates Canada’s commitment to protecting its industries from unfair competition.
Former Canadian ambassador to China, Guy Saint-Jacques, highlighted the economic integration between Canada and the U.S. as a factor in Canada’s decision to align with the U.S. position on tariffs. He also warned of potential retaliation from China in other industries, such as barley and pork, as China seeks to send a message in response to the tariffs imposed by Canada and other countries. Overall, the imposition of tariffs on Chinese imports reflects a broader effort to address unfair trade practices and protect domestic industries in the face of global competition.