Canada announced on Monday that it will implement a 100% tariff on imports of Chinese-made electric vehicles (EVs), aligning with similar measures recently adopted by the United States.
The tariffs are in response to what Western governments, including Canada and the U.S., claim are unfair subsidies the Chinese government provides, which allegedly give Chinese manufacturers a competitive advantage in the global market.
U.S. National Security Advisor Jake Sullivan encouraged the decision during his meeting with Canadian Prime Minister Justin Trudeau and other Cabinet ministers on Sunday. Sullivan, who is set to visit Beijing on Tuesday, emphasized the importance of a coordinated approach among Western allies in addressing what they see as China’s unfair trade practices.
Prime Minister Trudeau, while announcing the tariff, also revealed that Canada would impose a 25% tariff on Chinese steel and aluminium imports.
“Actors like China have chosen to give themselves an unfair advantage in the global marketplace,” Trudeau stated, highlighting the government’s stance on protecting Canadian industries from what they perceive as predatory practices.
Chinese officials did not immediately react to Canada’s new tariffs. However, the issue is expected to be raised during Sullivan’s visit to Beijing, particularly as China seeks to bolster its economy in the aftermath of the COVID-19 pandemic.
One of the key EVs affected by the new tariffs is the Tesla model manufactured at the company’s Shanghai factory. However, Tesla may circumvent these tariffs by shifting its supply chain to its factories in the U.S. or Germany. Currently, Chinese-made EVs do not have a significant presence in Canada. However, Chinese EV giant BYD has established a corporate entity in Canada and is eyeing entry into the market as early as next year.
The tariffs are part of a broader strategy by Canada and its allies to counter what they view as China’s state-directed policy of overcapacity and oversupply in key industries, including EVs, solar cells, and steel.
U.S. President Joe Biden, who imposed similar tariffs on Chinese imports in May, has argued that Chinese government subsidies allow Chinese companies to sell products at below-market prices, thereby undermining competitors globally.
