Canadian Prime Minister Justin Trudeau speaks during a news conference following the cabinet reshuffle at Rideau Hall in Ottawa, Ontario, Canada on July 26, 2023.
Blair Gable | Reuters
Canada said on Monday it would follow the United States and the European Union in imposing a 100% import tariff on electric vehicles made in China, citing concerns about unfair subsidies.
Canada has imposed a 6.1% tariff on electric vehicles made in China and imported into Canada. The government said on Monday. The 100% tariff will take effect on October 1.
The country will also impose 25% tariffs on Chinese-made steel and aluminum imports from October 15. Canadian Steel Producers Association.
The government's finance ministry says Canada's electric vehicle, steel and aluminum industries face “unfair competition” and trade practices from China. The United States and the European Union have made similar accusations that China has “overcapacity,” a claim China has called “baseless.”
Canada says the new measures are designed to “level the playing field for Canadian workers” and allow Canadian producers of electric vehicles, steel and aluminum to compete domestically and globally.
These steps will be reviewed one year from their effective date and may be extended or supplemented by other measures.
Meanwhile, the Biden administration announced in May a 100% tariff on Chinese electric vehicles. The European Union also imposed higher tariffs on Chinese-made electric vehicles in July, but last week it cut some planned tariffs on Chinese-made Tesla electric vehicles and other Chinese electric vehicle manufacturers.
Vincent Chan, China strategist at Aletheia Capital, told CNBC's “Street Signs Asia” on Tuesday. Canada's tariffs could hurt China's electric vehicle growth but “won't completely eliminate it.”
A spokesperson for the Chinese Embassy in Canada said in a statement on Monday China expresses strong dissatisfaction and firm opposition to thisThe spokesperson added that the move “violates WTO rules” and “will harm trade and economic cooperation between China and Canada.”
“What I want to emphasize is that the rapid development of China's electric vehicle industry is the result of continuous technological innovation, improvement of industrial and supply chains, and full market competition.” Government subsidies.
Chinese electric vehicle manufacturer BYD opened its first bus assembly plant in Canada in June 2019 and launched electric buses in Toronto. However, Chinese brands are still not major players in the country, Chinese state media Global Times reported in June.
According to statistics, after Tesla began shipping electric vehicles produced at its Shanghai factory to Canada in 2023, car imports from China to Vancouver, Canada's largest port, increased by 460% year-on-year to 44,356 vehicles. Reuters quotes data. Tesla did not immediately respond to CNBC's request for comment.
Canada will also review other industries critical to the country, including batteries, semiconductors and solar products.
–CNBC’s Sonia Heng contributed to this report.