Canada Eyes Tariffs On Chinese-Made EVs Following US And EU Moves

Canada is considering the possibility of imposing import tariffs on Chinese-made electric vehicles and is willing to seek public opinion in this regard, said the Canadian Deputy Prime Minister and Finance Minister, Chrystia Freeland, as per reports from Al Jazeera.

The minister iterated on Monday that the domestic car sector is facing unfair competition because of China’s ‘state-directed policy of overcapacity’, and added that Ottawa would have a 30-day public consultation period to gauge the response.

“Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” Freeland told reporters in Vaughan, Ontario, echoing concerns raised by the United States and the European Union.

The public consultation is aimed at streamlining the government’s decision and its response to the policy which may encompass import duty on tariffs. The move also aligns Ottawa with its allies in Washington and Brussels.

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US Introduced Tariff Hikes

Last month, US President Joe Biden introduced a series of significant tariff hikes on various Chinese imports, including electric vehicles. Similarly, the European Commission, responsible for trade policy across 27 member states, is preparing to levy additional tariffs of up to 38.1 per cent on Chinese manufacturers like BYD, Geely, and SAIC, as well as Chinese-produced Tesla and BMW cars, according to Al Jazeera.

In response, China has dismissed allegations of unfair subsidies or claims of overcapacity, attributing the growth of its electric vehicle industry to advancements in technology, market conditions, and industry supply chains.

An opinion piece published in the Chinese state-backed Global Times newspaper, advocated for “Canada to remain strategically rational” and not “sacrifice normal economic exchanges with China for the sake of Washington’s strategic selfishness.”
Canadian tariffs on Chinese EVs “may undermine market confidence among Chinese investors, worsen bilateral relations, and hinder normal economic and trade cooperation,” the opinion piece stated.

Canadian Government Faces Domestic Pressure

The Canadian government had come under domestic pressure to act against Chinese-manufactured EVs as Canada has been trying to secure its position as a critical part of the global EV supply chain. Freeland declined to get into the specifics of what Ottawa’s potential action would be or if EV components like batteries could also be targeted, but said “Everything was on the table.”

“We’re not ruling anything out,” she said, adding “that we are bringing to bear our strongest trade action tools.”

Canada has secured multibillion-dollar agreements to attract companies across the entire electric vehicle supply chain, aiming to strengthen its manufacturing hub in Ontario, as reported by Al Jazeera.

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