Prime Minister Justin Trudeau has unveiled a sweeping new trade policy, imposing a 100% tariff on nearly all Chinese-made EVs, including certain hybrids, trucks, and buses. This move, announced Monday, aims to counter what Trudeau describes as China’s unfair competitive edge in the global EV market. The Prime Minister accused China of breaching international trade norms and undermining Canadian auto and metal workers.
The new tariffs mark a significant escalation in Canada’s trade stance, aligning with similar recent actions by the United States. Trudeau emphasized that the tariffs are a response to China’s practices, which, according to a Department of Finance press release, present an “extraordinary threat” to Canada’s automotive and metal industries due to the country’s non-market economy and substandard environmental and labor practices.
"Canada is committed to leading the global transition to the vehicles of tomorrow," Trudeau stated at a press conference in Halifax. "However, China's actions have distorted the playing field and placed our industry at a disadvantage."
The tariffs, set to take effect October 1, will be applied in addition to a 6.1% surtax on Chinese EVs. Starting October 15, Canada will also impose a 25% surtax on Chinese steel and aluminum imports. These measures reflect a broader strategy to shield Canadian industries and encourage domestic growth in the EV sector.
This decisive action follows a similar announcement by U.S. President Joe Biden earlier this year, which also imposed 100% tariffs on Chinese-made EVs. During their retreat, the U.S. national security advisor, Jake Sullivan, reportedly discussed these issues with Trudeau’s cabinet, highlighting the interconnected nature of these trade policies.
The Canadian government’s decision aligns with broader investments in developing a domestic EV supply chain over recent years. Despite significant federal and provincial investments, the Chinese EV sector remains a formidable competitor, prompting concerns across Canada’s emerging EV industry—from mining to battery production.
The Trudeau administration is also initiating a new 30-day consultation on “sectors critical to Canada’s future prosperity,” which is expected to include industries such as batteries, semiconductors, and solar products, all vital to the energy transition.
“Recent consultations have underscored the need for extraordinary measures to address this unprecedented challenge,” the Department of Finance noted. This consultation aims to refine strategies and bolster Canada’s position in the evolving global market.
The diplomatic tensions between Canada and China have escalated through a series of tit-for-tat expulsions of diplomats, initiated by Canada’s expulsion of a Chinese diplomat accused of intimidating a Canadian lawmaker. Additionally, multiple reports have surfaced alleging Chinese interference in Canadian elections, with claims that Chinese diplomats and proxies attempted to influence election outcomes in favor of specific candidates. Further straining relations, Canada has been vocal in its criticism of China’s human rights abuses, particularly concerning the treatment of Uyghur Muslims.
