Canada targets China with EV, steel tariffs, eyes further action
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The news: Canada will impose a 100% tariff on Chinese electric vehicles and a 25% surtax on imported steel and aluminium from China, mirroring recent moves from the US and the EU and escalating Western trade tensions with the Asian nation.
Canada said it was also considering further tariffs on chips, solar cells, batteries and critical minerals as it seeks to strengthen its role in the global EV supply chain.
The North American country also intends to restrict eligibility for its zero-emission vehicle incentives to products from countries with free trade agreements with Canada.
The context: China is Canada’s second-largest trading partner, only behind the US.
The EV tariffs, effective 1 October, align with moves by global partners, including a 100% tariff on Chinese EVs imposed by the US and the European Union’s additional tariffs of up to 36.3% on top of existing ones on Chinese EVs.
The measures, which risk potential retaliatory actions from China, were also seen as a safeguard for the tens of billions of dollars in subsidies that Canadian governments have pledged towards developing local electric vehicle and battery factories being established by companies like Honda, Stellantis, Volkswagen, General Motors, LG and others.
The surcharge on steel and aluminium product imports begins on 15 October.
The numbers: Data from the country’s largest port in Vancouver last year showed a 460% annual surge in automobile imports from China, as Tesla began exporting Shanghai-made EVs to Canada, Reuters reported.
Tesla’s shares dropped as much as 4% on Monday amid concerns the company will incur higher costs to shift exports to Canada from the US.
What they said: "I think we all know that China is not playing by the same rules," Prime Minister Justin Trudeau told reporters in Halifax, Nova Scotia.
“What is important about this is we're doing it in alignment and in parallel with other economies around the world."
The sources: Canada’s Department of Finance, Reuters, The New York Times
