Canada announced on Monday that it would be imposing a 100% tariff on imports of Chinese-made electric vehicles, in response to what Western governments see as unfair subsidies given to the Chinese industry. The decision was influenced by US national security adviser Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau. Canada will also be imposing a 25% tariff on Chinese steel and aluminum. The move comes after the US imposed similar tariffs on Chinese products. Chinese EV giant BYD has expressed interest in entering the Canadian market, but Chinese brands are not currently major players in Canada.
Sullivan is set to visit Beijing on Tuesday and is likely to discuss the tariffs with Chinese officials as Beijing continues to recover from the Covid-19 pandemic. The US believes that Chinese government subsidies give Chinese companies an unfair advantage, allowing them to sell products at lower prices. In addition to EVs, the US has also imposed tariffs on solar cells, steel, aluminum, and other products from China. Canada plans to consult on tariffs for Chinese batteries, battery parts, semiconductors, critical minerals, metals, and solar panels.
Canada’s decision to align with the US on tariffs may result in retaliation from China in other industries such as barley and pork. The former Canadian ambassador to China, Guy Saint-Jacques, believes that China will want to send a message in response to the tariffs. Trudeau and Freeland emphasized the need to protect Canada’s EV sector from Chinese overcapacity and oversupply, which they see as a threat to the industry’s growth and potential.
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