Canada. Government announces additional tariffs on Chinese electric cars

Prime minister Canada announced that the tariffs will apply from October 1 to all electric vehicles produced in Chinaas well as for parts of hybrid cars, both passenger cars and buses, trucks and delivery vans.

Speaking during an away cabinet meeting in Halifax, the prime minister stressed that the tariffs would be imposed “to level the playing field for Canadian workers” and allow the Canadian electric car sector to compete in the market.

From October 15, Canada will also impose additional tariffs of 25 percent on steel and aluminum imports from China.

In late June, Deputy Prime Minister Chrystia Freeland announced preparations for additional tariffs on electric cars imported from China, after consultations were underway in July. At the time, Freeland said that “Canadian workers and the auto sector face unfair competition from China's overproduction policies, which undermine the ability of the Canadian electric vehicle sector to compete domestically and internationally.”

After the introduction by the European Union and USA additional duties on electric cars imported from China, the Canadian government was concerned that some of the Chinese exports, which had previously gone to the American and European markets, could be transferred to the Canadian market.

The US announced on May 14 a 100% tariff increase from August 1, and on June 12 European Commission announced the introduction of transitional additional duties from July 4, before the final decision is made in the autumn.

Currently, China is the only country that ships Tesla cars to Canada, but Chinese companies also supply batteries and components for electric car production, which means competition for manufacturing in which Canada has invested significantly in recent years.

Automotive manufacturing in Canada employs more than 125,000 people. It is a unionized sector, and Canada’s supply chain capacity for electric vehicles is considered the first in the world. Since 2020, more than C$46 billion ($34.1 billion) has been invested in electric vehicle projects in Canada, with governments committing C$53 billion ($39.3 billion). tax breaks for investors, subsidies and capital investment. The federal and provincial governments are also expanding resource extraction while closing off access to critical minerals mined in Canada to Chinese companies.

Since 2020, China has become the largest producer and exporter of electric cars, and its sector is strongly supported by government subsidies, the government said in a statement earlier. In 2023, China's exports of electric cars will be worth C$47.2 billion ($35 billion), up from C$0.2 billion in 2018.