Canada weighs import tariffs on Chinese electric vehicles
- In Reports
- 12:28 PM, Jun 25, 2024
- Myind Staff
Canada is considering imposition of import tariffs on Chinese-made electric vehicles and will solicit public opinion on the matter, announced Deputy Prime Minister Chrystia Freeland.
Freeland pointed out the difficulties faced by the domestic car sector due to China's "state-directed policy of overcapacity," which she argued creates unfair competition. She announced that Ottawa would commence a 30-day public consultation period starting July 2 to determine Canada's appropriate response.
“Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” Freeland told reporters in Vaughan, Ontario, echoing concerns raised by the United States and the European Union.
Freeland mentioned that public consultations will aid the government in shaping its policy response, which could involve tariffs on imports. She also noted that such a move would align Ottawa with allies in Washington and Brussels.
Last month, United States President Joe Biden introduced a series of significant tariff hikes on various Chinese imports, including electric vehicles. Meanwhile, the European Commission, responsible for trade policy across its 27 member states, is preparing to impose additional duties of up to 38.1% on Chinese manufacturers such as BYD, Geely, and SAIC, as well as on Chinese-built Tesla and BMW vehicles.
China has refuted allegations of unfair subsidies or claims of overcapacity, asserting that the growth of its electric vehicle (EV) industry stems from its technological advantages, market conditions, and robust industry supply chains.
An opinion piece published in the Chinese state-backed Global Times newspaper before Freeland’s announcement on Monday advocated for “Canada to remain strategically rational” and not “sacrifice normal economic exchanges with China for the sake of Washington’s strategic selfishness.”
Canadian tariffs on Chinese EVs “may undermine market confidence among Chinese investors, worsen bilateral relations and hinder normal economic and trade cooperation,” a Global Times reporter said in the opinion piece.
Prime Minister Justin Trudeau's Liberal government, aiming to establish Canada as a pivotal player in the global electric vehicle (EV) supply chain, has faced domestic pressure to take action against Chinese-made EVs.
The Premier of Ontario, Canada's most populous province and a key hub for car manufacturing, recently urged Ottawa to impose tariffs of at least 100% on Chinese-made electric vehicles as a measure to safeguard jobs in the automotive sector.
Freeland refrained from detailing Ottawa's potential actions or specifying whether components such as EV batteries might also be targeted. However, she emphasized that all options were being considered.
“We’re not ruling anything out,” she said, adding “that we are bringing to bear our strongest trade action tools.”
Canada has inked deals worth billions of dollars to woo companies involved in all parts of the EV supply chain to bolster its manufacturing heartland in Ontario.
Image source: Bloomberg
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