Canada announces plans to impose 100% surtax on Chinese electric vehicles

Aug. 26 (UPI) — The Canadian government announced Monday that it would impose a 100% surtax on all electric vehicles made in China and a 25% surtax on imported Chinese steel and aluminum.

The government said the electric vehicle surcharge would take effect Oct. 1 and would apply in addition to the 6.1% most-favoured-nation tariff currently applied to vehicles made in China and imported into Canada.

“We are transforming the Canadian auto sector into a global leader in building the vehicles of tomorrow,” Canadian Prime Minister Justin Trudeau said at a news conference Monday. “But players like China have chosen to give themselves an unfair advantage in the global marketplace.”

Automotive Parts Manufacturers Association President Flavio Volpe has urged Canadian lawmakers to impose steep tariffs on Chinese electric vehicles, as the United States does. He says the tariffs are justified by China’s failure to comply with trade rules.

In May, U.S. President Joe Biden announced new tariffs on about $18 billion worth of imported Chinese electric vehicles, which could have entered the U.S. market at a lower price than U.S.-made EVs, despite protests from Beijing. The move also increased tariffs on electric vehicles to 100%, up from 25%.

The surcharge on Chinese steel and aluminum will take effect on October 15. The final list of products that will be subject to surcharges will be announced by October 1.

“The Government of Canada will launch a second 30-day consultation on other sectors critical to Canada’s future prosperity, including batteries and battery parts, semiconductors, solar products and critical minerals,” the Department of Finance Canada said in a statement.

“A consultation notice will be published in the coming days to help inform any future government action.”

The department said Canadian workers face “unfair competition” from Chinese companies and products. It added that China’s “overcapacity” policy, which involves flooding the market with cheap goods, does not respect labour and environmental standards.

These policies threaten Canada’s long-term capacity, leading Finance Minister Chrystia Freeland to announce new measures.

“Canada is home to the talented workers, raw materials, clean electricity and specialized manufacturing capabilities needed to build electric vehicles, which is why our electric vehicle supply chain potential is ranked first in the world,” Freeland said in a statement.

“That is why our government is taking decisive action to level the playing field, protect Canadian workers and match the actions of our major trading partners.”