Canada is hiking tariffs on Chinese-made EVs, steel

Canada is set to introduce higher tariffs on Chinese-made electric vehicles and Chinese steel, Prime Minister Justin Trudeau told reporters in Halifax on Monday.

Speaking at the Liberal cabinet retreat,  Trudeau said, “Shortly, we will be introducing a 100 per cent tariff on Chinese-made electric vehicles and a 25 per cent tariff on Chinese steel and aluminum.”

He said this was being done to spur EV manufacturing in Canada.

The announcement brings Canada in line with recent U.S. trade policy changes. President Joe Biden announced in mid-May that he was hiking tariffs on Chinese EVs from 25 per cent to 100 per cent this year though there is only one Chinese EV currently available in the U.S.

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In June, Finance Minister Chrystia Freeland told reporters that the federal government was concerned by “unfair” Chinese trade practices in the electric vehicle manufacturing sector. Freeland announced the start of a consultation process into potential response measures.

While Trudeau did not elaborate further, Freeland in her June announcement had indicated what the restrictions being considered might look like.

“The potential policy actions we are consulting on include a surtax on imports of Chinese EVs under Section 53 of the Customs Tariff Act, changes to which cars are eligible for the existing federal incentives for Zero Emissions Vehicle Program, and potentially broader investment restrictions in Canada,” Freeland said at the time.

Currently, the only Chinese-made EVs imported into Canada are Teslas made at the U.S. tech giant’s Shanghai factory.