Canada to Increase Tariffs on Chinese Electric Vehicles

Canada, like the United States and the European Union, plans to increase tariffs on imports of cheap Chinese electric vehicles to curb their influx. Chrystia Freeland, Canada's Deputy Prime Minister, stated at a press conference on Monday, July 4, that Canadian automotive industries are facing unfair competition due to China's deliberate policies aimed at increasing the production and export of electric vehicles, which undermines Canada's competitiveness in both domestic and international markets. She added that Chinese manufacturers have intentionally ramped up their production and exports to a level that severely impacts producers of such vehicles worldwide. A one-month consultation period with Canadian automotive industries and labor unions regarding the imposition of additional taxes on Chinese electric vehicles, cutting government subsidies for purchasing these vehicles, and limiting foreign investments will begin on July 2. Ms. Freeland emphasized that the Canadian government will strive to level the playing field in this sector and prevent the excessive influx of Chinese vehicles or their transfer through Canada to the U.S. market. She noted, 'All these options will be considered.' The European Union announced a few weeks ago that it would increase tariffs on Chinese electric vehicles by up to 38 percent in July. U.S. President Joe Biden also announced in May that tariffs on Chinese electric vehicles would quadruple to 100 percent. The Chinese government deemed this decision as politicizing economic matters and a violation of World Trade Organization regulations. According to government statistics, Canadian automotive industries produce over 1.5 million vehicles annually, contributing approximately CAD 18 billion (around USD 13 billion) to the country's economy each year. In recent years, the Canadian government has attempted to develop the production cycle of components and raw materials for battery and electric vehicle manufacturing domestically by providing billions of dollars in subsidies and investments to automakers operating in the country, including Honda and Volkswagen.