Prime Minister Justin Trudeau has announced his government will be implementing tariffs on imports of Chinese electric vehicles (EV), steel, and aluminum.
Ottawa will put a 100 percent tariff on Chinese-made EVs, including electric buses, cars, delivery vans, and certain hybrid vehicles, effective Oct. 1. A 25 percent tariff will also be put on steel and aluminum products starting Oct. 15.
Trudeau made the announcement during a cabinet retreat in Halifax on Aug. 26, saying the new measures aim to address China’s “unfair advantage” in the sectors.
“Actors like China have chosen to give themselves an unfair advantage in the global marketplace, compromising the security of our critical industries and displacing dedicated Canadian autos and metal workers,” he said. “So we’re taking action to address that.”
Ottawa will also launch a 30-day public consultation into other sectors it says are “critical to Canada’s future prosperity,” such as batteries and battery parts, semiconductors, solar products, and critical minerals, according to a government press release.
Additionally, Ottawa will restrict eligibility for its incentives for zero-emission vehicles, medium and heavy duty zero-emission vehicles, and the Zero-Emission Vehicle Infrastructure Program to only those products manufactured in countries that have established free trade agreements with Canada.
Trudeau said his government is working with its allies to ensure countries with “high labour standards, high environmental standards, and proper processes to deliver high-quality goods” are not unfairly penalized by China.
The Liberal government recently concluded a 30-day public consultation to gather feedback on imposing tariffs on Chinese EVs. It has accused Beijing of intentionally flooding the global market with EVs to undermine Western competitors.
The move on tariffs brings Canada into alignment with the United States, which implemented tariffs on Chinese exports in 2018 and is set to increase them in 2024. U.S. President Joe Biden ordered tariffs on Chinese EVs to increase from 25 percent to 100 percent effective Aug. 1, while the European Union has also announced a tariff of up to 37.6 percent on Chinese-made EVs.
U.S. National Security Adviser Jake Sullivan said at the Liberal cabinet retreat on Aug. 25 that while Canada would ultimately determine its own trade policy, U.S. officials would be speaking with their Canadian counterparts “behind closed doors about our experience and what we see.” Sullivan said issues remain with China’s “massive subsidies” going into its EV industry, as well as underlying national security questions related to data security and critical infrastructure.
“I will also point out that the European Union has taken action on this front, and the G7 has spoken broadly about this set of issues about overcapacity,” he added. “Canada will make its own determinations, but the U.S. does believe that a united front, a coordinated approach on these issues, benefits all of us.”
Poilievre accused China of exploiting “weak labour and environmental standards” to produce artificially cheap steel, aluminum, and EVs. The House of Commons trade committee also agreed on Aug. 21 to open hearings to examine the feasibility of tariffs against China, and has plans to summon Finance Minister Chrystia Freeland, Trade Minister Mary Ng, Industry Minister François-Philippe Champagne, and Foreign Minister Mélanie Joly to testify.
