Canada has announced significant tariffs on Chinese imports, including a 100% tariff on Chinese-made electric vehicles and a 25% tariff on Chinese steel and aluminum. This move follows similar actions taken by the United States over concerns of unfair advantages given to the Chinese industry through government subsidies. The tariffs were encouraged by U.S. national security adviser Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau.
One of the Chinese-made electric vehicles imported into Canada is from Tesla, but the company could avoid the tariff by supplying from other countries. Despite Chinese brands not being significant players in Canada, Chinese EV giant BYD has indicated plans to enter the Canadian market as early as next year.
The Chinese government is likely to challenge these tariffs as they work to repair their economy post-pandemic. President Joe Biden has also imposed tariffs on Chinese EVs, batteries, solar cells, steel, aluminum, and medical equipment over concerns of unfair competition due to government subsidies.
Canada will also consider tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals, and solar panels following a 30-day consultation period. The government aims to protect the Canadian EV sector from Chinese overcapacity and oversupply policies, which could harm local industries.
Experts anticipate retaliation from China in other industries, such as barley and pork exports. Canada’s economic integration with the U.S. makes it important to align with American positions on trade issues. Former Canadian ambassador to China, Guy Saint-Jacques, believes that China will want to send a message through their response to the new tariffs.
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