Canada Applies 100% Tariff to PRC-made Electric Vehicles

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Facts

• Following the US and EU, Canadian Prime Minister Justin Trudeau announced on Monday that it will impose a 100% tax on Chinese-made electric vehicle (EV) imports. Canada plans to impose a 25% tariff on steel and aluminum from China.^[1]
• The move follows allegations from Canada and Western nations that China is subsidizing its EV industry. China has criticized the action as 'trade protectionism' that 'violates World Trade Organization rules.'^[1]
• The duties are applicable to all EVs imported from China, including those manufactured by Tesla. After Tesla began exporting EVs made in Shanghai to Canada, the country's imports of Chinese automobiles increased by 460% year-on-year, reaching over 44K in 2023.^[2]
• Trudeau said Chinese EV overproduction and auto industry subsidies 'requires us to take action.' The EV surtax, on top of 6.1% import tariffs, will apply to Chinese electric and hybrid passenger cars, trucks, buses, and delivery vans starting Oct.1.^[3]
• So far, China has not sold many cars in Canada, but PRC EV manufacturer BYD will try to enter the Canadian market in 2025. Tesla could avoid the tariff by shipping EVs to Canada from factories in the US or Germany.^[4]
• Canada's imports of PRC EVs increased to $1.6B in 2023 last year — an increase from just under $97M the year before.^[5]

Sources: ^[1]BBC News, ^[2]Alarabiya, ^[3]The Economic Times, ^[4]Associated Press and ^[5]The Business Times.

Narratives

• Anti-China narrative, as provided by Global News. Implementing harsh taxes on Chinese-made EV imports is the appropriate course of action since China will flood the country with artificially cheap EVs and undercut the domestic EV manufacturing industry, jeopardizing Canadian jobs. Matching US tariffs on Chinese imports, — including at least a 100% tariff on Chinese EVs — will protect billions of dollars in public money and foreign investments in Canada's auto manufacturing sector.
• Pro-China narrative, as provided by Global Times. Imposing high import tariffs on Chinese-made EVs is trade protectionism and violates World Trade Organization regulations. The tariff would hurt companies from both nations, Canadian consumers, and Canada's green transition and climate change mitigation. Canada should remedy this mistake since it would gravely damage the global trade system.

Predictions