Canada has announced it will impose a 100% tariff on electric vehicles (EVs) imported from China, following similar moves by the US and European Union. Additionally, Canada plans to impose a 25% duty on Chinese steel and aluminum.
The Canadian government and its Western allies accuse China of subsidizing its EV industry, which they argue provides Chinese manufacturers with an unfair competitive edge. In response, China has denounced the tariffs as "trade protectionism" that "violates World Trade Organization rules."
Canadian Prime Minister Justin Trudeau stated, "We are transforming Canada's automotive sector to become a global leader in building the vehicles of tomorrow. However, actions like those of China create an unfair advantage in the global marketplace."
The tariffs on Chinese EVs are set to take effect on October 1, while the duties on steel and aluminum will begin on October 15. China's embassy in Canada defended its industry, claiming that the competitiveness of Chinese EVs results from technological innovation, established industrial and supply chains, and market competition, rather than government subsidies.
China is Canada's second-largest trading partner, following the US. In May, the US announced it would increase tariffs on Chinese EVs to 100%, and the EU followed with plans to impose duties of up to 36.3% on Chinese-made EVs.
Canada's new tariffs will impact Chinese EVs, including those produced by Tesla at its Shanghai factory. Mark Rainford, a commentator on the China-based car industry, suggested that Tesla might lobby the Canadian government for exemptions or consider shifting its Canadian imports to US or European factories if the tariffs are not sufficiently mitigated. Tesla did not respond immediately to a request for comment from BBC News.
Earlier this month, the EU reduced its proposed additional tariff on China-made Teslas by more than half following further investigations requested by Elon Musk's company.
Chinese car brands are still relatively rare in Canada, though some, like BYD, have made efforts to enter the market. As the world's largest EV manufacturer, China has rapidly gained a significant share of the global market. Meanwhile, Canada is securing multi-billion-dollar deals with major European car manufacturers as it aims to play a crucial role in the global EV industry.
