Earlier this week, the United States confirmed a dramatic increase in tariffs on certain Chinese products, including electric vehicles and many of their components. We wondered what Canada's response would be.
We got our first idea yesterday. Prime Minister Justin Trudeau remains evasive about Canada's position on the issue, despite growing pressure from the U.S. to increase tariffs.
"Obviously, we're following closely what our closest trading partner, the United States, is doing," Justin Trudeau told reporters at a press conference to mark the announcement of a battery supply chain in Port Colborne, Ontario.
The non-committal response comes as the U.S. plans to increase tariffs on Chinese electric vehicles from 27.5 to 102.5 percent, and from 7.5 to 25 percent on EV batteries and components coming from China.
These measures are designed to protect American commercial interests against what the Biden administration describes as China's unfair trade practices. In response to the U.S. actions, the Chinese Ministry of Commerce has promised retaliatory measures, heightening trade tensions between the two countries.
Canada has not adopted comparable tariffs to guard against a possible massive influx of Chinese-made electric vehicles. Asked directly about the American measures, Prime Minister Trudeau avoided saying whether Canada will follow suit.
It’s not surprising to see such reluctance. The Canadian government is emphasizing its strategy to become a leader in the electric vehicle supply chain. In his speech, Trudeau highlighted Canada's efforts to attract investment in the sector, creating jobs and offering a positive alternative for investors. So even as international trade pressures intensify, Canada remains cautious. Clearly, it would prefer to play a mediating role in creating reliable and lasting alliances in the automotive sector.