Canada is launching a 100% tariff on imports of Chinese-made electric vehicles effective Oct. 1, citing unfair trade practices that it says threaten the global EV market.
The country will also put a 25% tariff on imports of steel and aluminum made in China, effective Oct. 15.
“The measures are an important step towards ensuring Canadian workers and businesses can compete fairly. Global trade rules are not always adequate to protect against the type of non-market behavior we have witnessed from China in this sector,” Mary Ng, Canada’s trade minister, said in a news release.
The tariffs include hybrid vehicles, as well as trucks and buses produced in China.
According to the Canadian government, China’s state-directed policy of overcapacity and lack of labor and environmental standards threaten workers and businesses in the EV industry around the world and undermine Canada’s long-term prosperity.
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The tariffs announced by Canada on Monday follow the Biden administration’s announcement in May of a 100% tariff on Chinese EVs.
In July, the Biden administration also imposed a 25% tax on foreign-made steel imports routed through Mexico. The measure is aimed at curbing imports of metals from China and other countries that ship products through Mexico to circumvent tariffs, officials said.
Canadian officials will also launch a review on other industries critical to the country, such as batteries, semiconductors and solar products.
Canada’s auto manufacturing industry directly supports over 125,000 jobs, while the country’s steel and aluminum production sector supports over 130,000 jobs, the Canadian government said.
A news release posted Monday on the website of China’s embassy in Canada rejected the tariffs as “typical trade protectionism” that will “hurt the interests of Canadian consumers and enterprises, slow down the green transition process of Canada and won’t help global efforts to address climate change.”
“[China’s] competitiveness is gained through utilizing its comparative advantages and following market principles, rather than relying on government subsidies,” the Chinese embassy spokesperson said in a statement. “The Canadian side’s accusation of China’s so-called ‘overcapacity’ is groundless. The development of China’s EV industry has made positive contributions to the world’s efforts to address climate change and realize green energy transformation.”
Canada’s trade with China was about $76 billion in 2023, with imports of Chinese goods totaling $63 billion last year.
In the first half of 2024, Canada has imported more than $34 billion worth of vehicles and auto parts from global manufacturers, a 6.5% year-over-year increase compared to the same period last year.
Automobile imports from China to Canada’s largest port in Vancouver, British Columbia, jumped 460% year over year to 44,356 units in 2023, according to statistics from the Port of Vancouver.
Trade experts said Canada has seen a large increase in EVs from China since automaker Tesla began shipping EVs from its Beijing factory.
“Canadian imports of Chinese passenger vehicles maintained momentum throughout the year, placing them as the third-largest import category, amounting to $2.64 billion and experiencing a remarkable growth rate of 326% year-over-year,” Daniel Lincoln, a policy research analyst at the University of Alberta, wrote in a study, “Canada-China Trade: 2023 Year in Review.”
“This meteoric growth in imports of Chinese-produced passenger vehicles is likely reflective of Western models produced in China – such as Tesla EVs – as opposed to Chinese vehicle brands, which are largely unavailable in the Canadian market as of 2023,” Lincoln said.