Canada has announced it will impose a 100% tariff on imports of electric vehicles (EVs) made in China in a move that mirrors those made by the United States and European Union. According to a report by the BBC, Canada and its Western allies claim carmakers in China have an unfair advantage due to the country’s government subsidising its EV industry. A 25% duty on Chinese steel and aluminium is also planned.
“We are transforming Canada’s automotive sector to be a global leader in building the vehicles of tomorrow, but actors like China have chosen to give themselves an unfair advantage in the global marketplace”, said Canadian prime minister Justin Trudeau.
In response, China has deemed Canada’s decision to be a form of “trade protectionism” that “violates World Trade Organisation rules.” A spokesperson for China’s commerce ministry said the move “seriously undermines the global economic system, and economic and trade rules,” adding that Canada needs to immediately “correct its erroneous practices.”
Earlier this year in May, the US said it would quadruple its tariffs on China-made EVs to 100%, with the EU announcing in May that additional tariffs of up 38.1% would be imposed on such vehicles. However, the EU recently revised its planned extra tariff on China-made Teslas to just 9% from a previously planned 20.8% following Tesla’s request for an individual assessment.
Canada’s tariffs on China-made EVs will include those made by Tesla at its Shanghai Gigafactory, and industry analyst expect a switch to imports from the US or Europe if the carmaker can’t mitigate the tariff enough. Canada is Tesla’s 6th largest market this year, so preventing a price hike due to tariffs is important for the carmaker.
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