Canada imposes 100% tariff on Chinese electric vehicles

MADRID (Euronews) – Canada is imposing a 100% tariff on battery electric vehicles (BEVs) manufactured in China and imported into the country, the Canadian executive announced in a statement on Monday.

The campaign has aligned the North American country with its allies in the United States and the European Union while also imposing a 25 percent tax on aluminum and steel products imported into the country from China as a measure to protect its own manufacturers.

Prime Minister Justin Trudeau’s government also announced that tariffs on electric vehicles from China will take effect on Oct. 1, 2024, including electric passenger cars, trucks, buses, vans and some hybrid vehicles.

It added: “This additional tax would be imposed in addition to the current 6.1 per cent most-favoured-nation import tariff on electric vehicles manufactured in China and imported into Canada.”

On the other hand, import duties on steel and aluminum products from China will take effect from October 15, 2024.

Protecting Canada’s Automotive Industry

The Trudeau government reported after a cabinet meeting in Halifax, Nova Scotia, that the measures were being implemented to protect Canada’s auto industry, which provides more than 125,000 jobs, many of which are unionized, and said its electric vehicle supply chain “is No. 1 in the world.”

“However, Canadian workers and the auto industry currently face unfair competition from Chinese producers, who benefit from unfair and non-market policies and practices,” the government charged in the report.

The Canadian government noted that China’s “deliberate, state-led overcapacity policies and lack of strong labor and environmental standards threaten workers and businesses in the electric vehicle industry around the world” and “undermine Canada’s long-term economic prosperity.”

Moreover, Canada’s auto industry is highly integrated with the United States, and the vast majority of its light vehicle production (1.5 million last year) is exported to its southern neighbor.

So now the North American country has joined its allies in imposing a 100% import tariff on all-electric vehicles imported from the Asian giant this year.

It also joined the European Union, which also announced new tariffs on Chinese electric vehicles, although at a lower level than those now proposed by the United States and Canada.

According to a draft decision published by the European Commission last week, products made by SAIC Motor will face an additional EU tariff of 36.3%, while Geely Automobile Holdings and BYD will face tariffs of 19.3% and 17% respectively.

US manufacturer Tesla will be subject to an additional 9% tariff on its cars made in China and shipped to Europe.

Second 30-day consultation on other areas

Finally, the Canadian government announced that it would launch a second 30-day consultation to impose additional tariffs on other industries that are “critical to Canada’s future prosperity,” such as batteries and their components, semiconductors, solar products, and essential minerals.

Additionally, the Canadian government revealed its intention to restrict eligibility for the Zero Emission Vehicle Incentive (iZEV), the Medium and Heavy-Duty Zero Emission Vehicle Incentive (Imhzev), and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to countries with which Canada has negotiated a free trade agreement.

“Our government is taking decisive action to level the playing field, protect Canadian workers, and match the actions taken by our major trading partners,” said Chrystia Freeland, Canada’s Deputy Prime Minister and Finance Minister.