Canada is currently considering following in the footsteps of the United States and the European Union by imposing tariffs on Chinese-made electric vehicles (EVs). The government is set to begin a 30-day consultation on July 2 to address what Deputy Prime Minister Chrystia Freeland describes as a deliberate strategy by Chinese companies to flood the global market with EVs, creating an oversupply.
Freeland emphasized the importance of Canada’s automotive sector, which provides around 550,000 well-paying jobs. She expressed concerns about unfair competition stemming from China’s state-directed policies aimed at saturating the market and undercutting Canada’s EV industry both domestically and internationally.
The consultation process will delve into the reasons behind the surge in Chinese EV exports, focusing on unfair trade practices, labor conditions, and environmental standards. In addition to considering a surtax on imports, the government will explore the possibility of adjusting the federal EV purchase rebate, currently valued at up to $5,000 Canadian per vehicle, and expanding investment restrictions in the country.
Presently, the only Chinese-made EVs entering Canada are Tesla vehicles manufactured in Shanghai, with no Chinese-branded EVs being sold or imported at the moment. Freeland underscored the need for Canada to align its actions with its allies in the U.S. and the EU, emphasizing the interconnected nature of the North American auto sector and the necessity of preventing Canada from becoming a dumping ground for Chinese oversupply.
The decision to potentially impose tariffs on Chinese EVs follows similar moves by the U.S., where President Joe Biden has criticized Chinese government subsidies for providing an unfair advantage to Chinese companies in global trade by allowing them to operate without the need for profitability. This coordinated effort among Canada, the U.S., and the EU underscores the shared concerns regarding China’s trade practices and aims to protect domestic industries from unfair competition in the EV market.