This new 100% surtax on EVs made in China comes on top of an existing 6.1% import tariff.
Canada has recently announced its plans to impose a 100% tariff on imports on electric vehicles originating from China, starting October 1st. The North American nation is to be the latest country to propose significant new surtaxes on China-made EVs, echoing those taking place in the European Union, the United States and Türkiye.
This newly proposed duty would apparently come on top of the current 6.1% tariff imposed on vehicles imported into Canada. A Canadian government official has further reiterated too that this duty will apply to all EVs shipped from China, including those made by non-Chinese marques like Tesla, which has incidentally started shipping its Shanghai-made Model 3s and Model Ys into the country last year.
Now aside from these new tariffs imposed on China-made EVs, the Canadian government has also hinted at plans to limit eligibility for zero emission vehicle incentives as well. Officials are wanting to make incentives available exclusively to products made in countries which have negotiated free trade agreements with Canada.
Prime Minister Justin Trudeau has stated regarding this new surtax that Ottawa was acting to counter what he called China’s intentional, state-directed policy of over-capacity. “I think we all know that China is not playing by the same rules,” he told reporters.
He further added that Ottawa will continue to work with the United States and its other allies to ensure that customers around the world are not unfairly penalised by non-market practices of countries such as China. The Canadian government has since also announced alongside these new EV tariffs that it will be imposing a 25% duty on imported Chinese steel and aluminium, with it hinting that it may be considering additional punitive measures such as tariffs on chips and solar cells in the future.
The Chinese embassy in Canada responded to this newly proposed tariff by condemning the move as “protectionist” and a “politically dominant act”, adding that Canada has ignored World Trade Organisation (WTO) rules. A spokesperson for the embassy further added in a statement that Canada’s action will undermine normal economic and trade cooperation between the two countries, and hurt Canadian consumers and enterprises.
China is currently Canada’s second-largest trading partner, though it trails far behind the United States. The North American nation had experienced a 460% year-on-year spike (to 44,356 units) of China-made EVs entering its largest port, Vancouver, last year.
U.S. President Joe Biden had previously announced in May a quadrupling of tariffs on China-made electric vehicles to 100%, with Türkiye having proposed a 40% surtax on those products that same month. The European Union meanwhile has similarly slapped additional duties on imported EVs originating from China, with rates on some automakers to be as high as 36.3%.
