Justin Trudeau's government said last week it plans a 30-day consultation starting July 2nd, to look at possible measures to prevent Chinese-made electric vehicles from accessing the Canadian market.
This comes in the wake of the U.S. decision to impose 100-percent tariffs on electric vehicles from China. The European Union is also planning to increase tariffs, up to 48 percent for certain vehicles.
Today, the Canadian government made public the options it is considering, including tariffs on imported vehicles and blocking Chinese investment in new Canadian factories.
According to the document shared today, the Trudeau government appears only to be considering tariffs on vehicles that are completed. The list of items likely to be subject to tariffs does not include batteries or battery components.
The consultations will serve to gather input from stakeholders like unions and auto and parts manufacturers.
The consultation documents states that the Canadian electric vehicle industry is “at risk of being undermined by the significant recent increase in exports of Chinese EVs to the Canadian and global markets, enabled by unfair support through China’s use of a broad range of non-market policies and practices.”
The Chinese government subsidizes its auto industry, enabling companies to export their products at prices deemed unfairly low by other manufacturers. The protectionist measures adopted in the United States and being studied in Canada are designed to protect the North American market.
For the moment, we don't know what percentage of tariffs could be imposed, or which vehicle categories the measures might target (or spare).
The paper also addresses the possibility of Chinese automakers setting up shop in Canada to manufacture electric vehicles and sell them here while avoiding tariffs. Further, it seeks comments on the need for “additional actions like further policy guidance, monitoring, or restrictions related to transactions and investment from Chinese sources in the Canadian EV supply chain are required.”
Two further questions are open for public comment as well. The first is whether Canada should make electric vehicles manufactured in China ineligible for subsidies. The other concerns data privacy and security considerations for connected vehicles and related infrastructure.
As per Automotive News, the vast majority of Canadian imports of electric vehicles from China are Tesla vehicles produced at its Shanghai plant. Finance Minister Chrystia Freeland declined to comment on whether tariffs might apply to those EVs
The consultation runs until August 1. Clearly, it will fuel discussions over the coming month.