• Canada will undertake a consultation process regarding whether or not to increase tariffs on imports of electric vehicles from China.
Last week, we reported that pressure was mounting on the Canadian federal government to make a decision regarding tariffs on electric vehicles from China.
This came after U.S. President Joe Biden raised tariffs from 27.5 to 102.5 percent. That move immediately put pressure on the Canadian government. Last week, Ontario Premier Doug Ford urged Prime Minister Justin Trudeau to do the same.
On Monday this week, Finance Minister Chrystia Freeland announced that Canada was studying the possibility of imposing a surtax on imports of EVs manufactured in China. A 30-day consultation on the issue will begin on July 2 to look at how to counter what Freeland sees as a clear effort by Chinese companies to generate global oversupply.
The effect of such a practice is to drive down prices. In the case of electric vehicles, this favours Chinese products, which are highly subsidized by Xi Jinping's government, to the detriment of other manufacturers.
Aside from tariffs, the Canadian government will also look what to do about EV incentives given to buyers of electric vehicles with Chinese-made components.
The World Automobile Manufacturers of Canada, which represents the interests of its members to the authorities, expressed its support for the government's announcement. It stated that “Canada’s automotive industry has been a longstanding supporter of fair and rules-based trade policy. It’s important that the Government of Canada provides a level playing field for the sector and we look forward to participating in the consultation process.”
Premier Ford expressed his approval in a post on X. “I’m glad to see the federal government is listening to our calls and taking quick action to protect Ontario and Canadian jobs from unfairly subsidized Chinese imports, particularly electric vehicles. Thousands of good-paying Ontario jobs and more than $43 billion in investments in our electric vehicle sector are at stake.”
Unifor, the union representing some 23,000 Canadian auto workers, called it an “important step in protecting Canada's automotive and parts sectors.”