Canada Set To Follow US, EU Lead On Hiking Tariffs On Chinese-Made EVs

First it was the EU and the US, now it looks like Canada could be next to weigh tariffs on Chinese made electric vehicles. 

Justin Trudeau’s government is considering new tariffs on Chinese-made electric vehicles to align with US and EU actions, according to a new report this week by Bloomberg.

An announcement about public consultations on these tariffs is expected soon, despite the fact that no final decisions have been rendered, the report said, citing people familiar with the matter. 

Bloomberg reported that Trudeau faces growing pressure to follow President Biden’s lead, who in May announced plans to nearly quadruple tariffs on Chinese-made EVs to 102.5%.

Both the US and the EU are worried about China flooding the market with cheap supply of EVs and undermining their domestic industries, with seasoned Chinese EV companies like BYD now aggressively entering global markets.

The report says that on Thursday, Ontario Premier Doug Ford accused China of exploiting low labor standards and dirty energy to produce cheap EVs and urged Trudeau’s government to match Biden’s tariffs.

“Unless we act fast, we risk Ontario and Canadian jobs,” he said on X.

Meanwhile, Chinese EV imports to Canada soared to C$2.2 billion last year from less than C$100 million in 2022, with a fivefold increase in cars arriving at Vancouver after Tesla began shipping Model Y vehicles from Shanghai, the report says. 

The Canadian government’s main concern isn’t Tesla but the potential influx of cheap Chinese-made cars. Trudeau and his ministers have said they are monitoring other countries’ actions but haven’t committed to new tariffs. Trudeau mentioned significant discussions about Chinese production at the recent G7 summit in Italy.

A spokesperson for Finance Minister Chrystia Freeland stated that Canada is “actively considering next steps to counter Chinese oversupply” without specifying if tariffs are planned.

Freeland’s press secretary said: “China has an intentional, state-directed policy of overcapacity. Protecting Canadian jobs, manufacturing, and our free trade relationships is essential.”

Recall we wrote days ago that the tariffs were only expected to slow, but not stop, Chinese EV sales in Europe. Nikkei Asia said that manufacturers like BYD will remain competitive against local producers despite the tariffs. 

Eugene Hsiao, head of China autos at Macquarie Capital, told Nikkei: “BYD’s cost advantage is high enough that they can profitably export even at a 35% tariff.”