The government of Canada announced plans on Monday to inflict import tariffs on Chinese electric vehicles following its allies’ move, Reuters reports.
Canada mulls import tariffs on China’s EVs
Canada mulls aligning its policies with the United States and the European Union to protect its domestic electric vehicle industry against the surge of heavily subsidized Chinese imports.
Finance Minister Chrystia Freeland reiterated that the local automotive industry struggles with “unfair” competition from China’s “state-directed policy of overcapacity.”
“Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada.”
Finance Minister Chrystia Freeland told reporters in Vaughan, Ontario
Public consultation launched
Considering the growing concerns against Chinese EV imports, the Canadian government will launch a 30-day public consultation period starting on July 2 to get people’s insights.
The Finance Minister cited the recent moves of the EU and the US, hinting that Canada could announce a higher import tariff. However, Minister Freeland omitted disclosing specific information on Ottawa’s potential measures.
“We’re not ruling anything out. We are bringing to bear our strongest trade action tools.”
Finance Minister Chrystia Freeland told reporters in Vaughan, Ontario
Nonetheless, the Canadian government is strongly determined to prevent China from oversupplying electric vehicles and monopolizing the European market.
“We are living in a world right now where China is taking advantage of the global economic system. We know we need to defend our national interest, and we will.”
Finance Minister Chrystia Freeland told reporters in Vaughan, Ontario
Potential move
The Canadian government is considering using Section 53, which apparently offers “very strong and very broad powers to the finance minister to act.”
As of today, the only China-made electric vehicle imports in Canada are Tesla models from Giga Shanghai.
China-made vehicles currently adhere to tariffs, but only under Section 53 of the Customs Tariff Law. Freeland is considering imposing a surtax on top of the current tariffs.
The newly launched consultation will also explore potential modifications in federal incentives for zero-emission vehicles, including rebates of up to $5,000 for EV purchases or leases.
Despite the EU, the US, and Canada’s concerns, China continues to deny accusations of unfair subsidies or overcapacity. It contends that the Chinese companies’ technological innovations and robust supply chains primarily propelled its EV industry, not subsidies.
