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At the federal cabinet retreat in Halifax today, Canadian Prime Minister Justin Trudeau announced Canada will impose a 100% tariff on Chinese-made EVs imported into the country, according to the CBC.
Trudeau said this decision was made to protect Canada’s burgeoning EV industry and that it will “level the playing field for Canadian workers.”
Though Chinese automakers such as BYD aren’t major players in Canada’s EV industry right now, the country has seen a sharp rise in Chinese imports recently. Most notably, Tesla’s decision to supply Canada with vehicles from its Shanghai manufacturing plant as opposed to its US factories has seen import figures soar.
This new tariff will apply to electric and hybrid passenger vehicles, including trucks, buses, and delivery vans. It will also apply to Teslas manufactured in Shanghai and sold in Canada.
The tariff will likely force Tesla to supply Canada with vehicles manufactured in Europe or the US.
Trudeau said he was taking action to address the “unfair advantage in the global marketplace” that China enjoyed. He also announced a 25% surtax on Chinese steel and aluminum imports, starting October 15th.
We’re likely to see opposition from China to this announcement, which eliminates any price advantages Chinese-made EVs have enjoyed up until now in Canada.
According to a senior government official, this decision has been brewing for a while — long before the US announced its own Chinese import tariffs back in May.
In May, the Biden administration announced a sharp increase in tariffs on Chinese EVs, designed to protect US manufacturers. Tariffs quadrupled to 100% with levies on solar cells doubling to 50%. China said at the time that it opposed these hikes and threatened retaliation.
Earlier this year the EU also announced it was enforcing new tariffs of up to 38% on top of the existing 10% tariff on Chinese-made EVs, following an investigation by the EU Commission.
Chinese automakers who cooperated with the investigation faced lower tariffs than uncooperative companies. Finalized tariffs were announced yesterday, with SAIC facing the maximum 36.3% tariff, Geely seeing 19.3%, and BYD, which cooperated, paying an extra 17%, according to Bloomberg.
