Following the United States and the European Union (EU) imposing tariffs on Chinese electric vehicles (EVs), Canada is also considering playing the tariff card. The move aims to shield the domestic auto industry from the impact of overproducing Chinese EVs due to subsidies.
According to Reuters, Chrystia Freeland, Canada’s Minister of Finance, responded to questions about U.S. and EU concerns over Chinese EVs by stating, “The domestic auto sector faced unfair competition from China’s state-directed policy of overcapacity.” “Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” she added.
Canada plans to explore countermeasures through a 30-day public consultation starting the 2nd of next month.
Freeland stated that imposing tariffs on imported goods, including Chinese EVs, could be included in the response. However, she did not specify the items subject to tariffs, such as batteries and other EV components. “We’re not ruling anything out,” she said, adding: “We are bringing to bear our strongest trade action tools.”
Last year, the number of Chinese cars arriving in Vancouver, Canada, recorded 44,000 units, an increase of more than five times from the previous year, as Tesla exported the Model Y produced in Shanghai, China, to Canada. In response, the Governor of Ontario, Canada, requested to impose a minimum 100% tariff on Chinese vehicles last week.
Before Canada took action, the U.S. and EU had already raised tariffs on Chinese electric vehicles (EVs) to 102.5% and 48%, respectively. In response, China’s state-run media, Global Times, argued, “We advise Canada to remain strategically rational. Ottawa does not need to sacrifice normal economic exchanges with China for the sake of Washington’s strategic selfishness.”