Canada hits China-made electric cars with 100% tariff

27.08.2024

Canada has announced a 100% tariff on imports of electric vehicles (EVs) manufactured in China, following similar moves by the United States and the European Union. Additionally, Canada plans to implement a 25% duty on Chinese steel and aluminum imports.

This decision comes amid accusations from Canada and its Western allies that China is subsidizing its EV industry, thereby giving its manufacturers an unfair advantage in the global market. In response, China has criticized the decision as “trade protectionism” and claims it “violates World Trade Organization rules.”

Canadian Prime Minister Justin Trudeau stated, “We are transforming Canada’s automotive sector to lead globally in creating the vehicles of the future, but countries like China have opted to secure an unfair advantage in the global marketplace.”

Canada’s new tariffs on Chinese EVs will take effect on October 1, while the duties on steel and aluminum will be applied starting October 15. A statement from the Chinese embassy in Canada argued that the swift growth of China’s EV industry is due to continuous technological innovation, robust industrial and supply chains, and a fully competitive market, not government subsidies. “Its competitiveness is derived from leveraging its comparative advantages and adhering to market principles,” the statement added.

China is Canada’s second-largest trading partner, after the United States. Earlier this year, the US announced plans to increase tariffs on Chinese EV imports to 100%, and the EU followed with its own plans to impose duties of up to 36.3% on China-made EVs.

The new Canadian tariffs will also apply to Tesla vehicles produced at the company’s Shanghai facility. Mark Rainford, a China-based automotive industry analyst, noted, “Tesla will almost certainly lobby the Canadian government for exemptions from these tariffs, as they have done in Europe. If they don’t succeed in reducing the tariffs, they might shift their Canadian imports to their US or European factories, given that Canada is their 6th largest market this year and quite significant.”

Tesla did not immediately respond to a request for comment from BBC News. Recently, the EU reduced its planned additional tariff on China-made Teslas by more than half after further investigations prompted by the car manufacturer.

While Chinese car brands are still rare in Canada, some companies like BYD are beginning to explore entry into the market. China is the largest EV manufacturer globally, and its car makers have rapidly captured a significant share of the international market. Meanwhile, Canada has secured multi-billion-dollar agreements with major European car manufacturers, aiming to become a central player in the global EV industry.