Canada imposes a 100% tariff on imports of Chinese-made electric vehicles, matching the US
Canada announced on Monday that it will impose a tariff of 100% on the imports from China of electric vehicles. This is in line with U.S. tariffs, which were imposed because Western governments claim China has unfairly subsidized its industry.
The announcement was made after U.S. National Security Advisor Jake Sullivan encouraged the Canadian Prime Minister Justin Trudeau to make it during a Sunday meeting. Sullivan will make his first trip to Beijing on February 2.
Trudeau announced that Canada will also impose a 25 percent tariff on Chinese aluminum and steel. He said that “Actors such as China have chosen themselves to gain an unfair advantage on the global market.”
Tesla is one of the Chinese companies that imports EVs into Canada, but the U.S. firm could avoid tariffs by supplying Canada with vehicles made in factories in the U.S.
|
Chinese brands have not yet established themselves in Canada. BYD, the Chinese electric vehicle giant, established a Canadian corporation last spring. It has stated that it plans to enter the Canadian market by next year.
Sullivan is likely to hear from Chinese officials about their concerns regarding the American tariffs as Beijing works to rebuild its economy following the COVID-19 epidemic. In May, U.S. president Joe Biden imposed major new tariffs against Chinese electric vehicles and advanced batteries. He also imposed additional tariffs on steel, aluminum, medical equipment, and solar cells.
“The U.S. believes that a united face, a coordinated strategy on these issues is beneficial to all of us,” Sullivan said Sunday.
Biden said that Chinese government subsidies on EVs, consumer goods and other products ensured that Chinese companies didn’t need to make a profit. This gave them an unfair edge in the global market.
Chinese companies can sell EVs as low as $12,000 Solar cell plants, steel mills and aluminum factories in China have the capacity to meet most of the global demand. Chinese officials claim that their production helps to keep prices low and will help the transition to a green economy.
Trudeau explained the new tariffs by saying, “We are doing it in line, in parallel with other economies around world who recognize that this challenge is one that we all face.” “Unless we want to race to the bottom as a society, we must stand up.”
Chrystia Freedom, Deputy Prime Minister, said Canada will also launch a consultation for 30 days about possible tariffs against Chinese batteries, battery components, semiconductors, essential minerals, metals, and solar panels.
Freeland stated that “China’s intentional state-directed overcapacity policy and oversupply is designed to cripple the industry in Canada.” We will not let that happen to the EV industry, which has shown so much promise.
The Chinese Embassy stated that Ottawa ignored Beijing’s repeated objections, and said this move would damage trade and economic collaboration.
“This move is typical trade protectionism and politically-motivated decision, which violates the World Trade Organization(WTO) rules and goes against Canada’s traditional image as a global champion for free trade and climate change mitigation,” the embassy said in an emailed statement. “China will take the necessary measures to protect the legitimate rights of Chinese companies.”
Guy Saint-Jacques, a former Canadian Ambassador to China, said that Canada “had no choice but to support the U.S. view, given the level of economic integration we have with America. Over 75% our exports are sent to the U.S.”
Saint-Jacques warned that Canada should expect retaliation by China in other industries. He added that barley and pig meat are likely targets, as the Chinese could get them from other countries.
He said that “China would want to send a signal”.
