Canada considers imposing new import tariffs on Chinese EVs

Canada’s auto sector faces ‘unfair competition from China’s intentional, state-directed policy of overcapacity’, says the Canadian finance ministry

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An electric vehicle from the Chinese company BYD on display in Berlin on Tuesday. Photo: Bloomberg

Published: 12:32am, 25 Jun 2024Updated: 5:57am, 25 Jun 2024

Canada is seeking public opinion on whether it should join the United States and Europe in imposing new tariffs on Chinese-made electric vehicles.

On July 2, Ottawa will start a 30-day consultation period on potential policy responses “to protect Canada’s auto workers and its growing EV industry” and “prevent trade diversion resulting from recent action taken by Canadian trading partners”, its finance ministry announced on Monday.

Canada’s auto sector faces “unfair competition from China’s intentional, state-directed policy of overcapacity and lack of rigorous labour and environmental standards”, the ministry said.

Announcing the plan on Monday in Vaughan, Ontario, Deputy Prime Minister and Finance Minister Chrystia Freeland said options included tariffs on Chinese EV imports, investment restrictions, and adjustments to federal incentives for electric vehicles, noting that “nothing is ruled out”.

The move comes amid pressure from domestic automakers to increase tariffs to protect jobs. Last week, the premier of Ontario, Canada’s most populous province and primary car manufacturing hub, urged Ottawa to impose tariffs of at least 100 per cent on Chinese-made EVs.

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Chinese-made electric vehicles face additional EU import tariffs of up to 38%

Canada has been coordinating with its allies since several of them made similar actions only weeks ago. In mid-May, despite extremely low imports, Washington announced a tariff increase on Chinese EVs from 27.5 per cent to 102.5 per cent, along with increased tariffs for lithium-ion batteries and other clean energy products produced in China like solar cells.