In a move aimed at safeguarding its domestic automotive sector, Canada is evaluating the imposition of tariffs on electric vehicles imported from China. The proposal comes amidst growing concerns within Canada's government regarding what Deputy Prime Minister Chrystia Freeland described as China's deliberate strategy of global oversupply in the EV industry. This alleged practice, according to Freeland, undercuts fair competition and poses a threat to local EV manufacturers, including those in Ontario, Canada's automotive heartland.
Freeland emphasized the need for public feedback, announcing a 30-day consultation period starting July 2, to gauge Canadian sentiment and explore potential policy responses. This step mirrors recent actions taken by other Western allies, notably the United States and the European Union, which have also implemented or proposed tariffs on Chinese EVs and related components.
The United States, under President Joe Biden, recently unveiled significant tariff hikes on various Chinese imports, including electric vehicles. Similarly, the European Commission is poised to introduce additional duties of up to 38.1% on Chinese EV producers such as BYD, Geely, and SAIC, as well as Chinese-built Tesla and BMW cars. These measures underscore a broader international effort to address perceived trade imbalances and unfair practices in the global EV market.
China, however, has vigorously denied allegations of subsidization or overcapacity, attributing its EV industry's growth to technological prowess and competitive advantages in global supply chains. In response to Canada's considerations, a commentary in China's Global Times warned against jeopardizing bilateral economic ties and urged Canada to maintain strategic independence from what it termed as U.S. strategic self-interest.
Prime Minister Justin Trudeau's government, which has actively sought to position Canada as a pivotal player in the EV supply chain, faces mounting pressure domestically to protect local jobs and industry interests. Leaders from Ontario, home to Canada's major car manufacturing hub, have advocated strongly for tariffs as a means to shield the province's automotive workforce from perceived foreign market distortions.
Freeland refrained from specifying the potential scope of tariffs or whether they would extend to EV components like batteries but affirmed that all options remained on the table. She emphasized Canada's readiness to utilize robust trade tools to defend its economic interests and align policies with international allies facing similar challenges in the EV sector.
Canada's strategic initiatives to bolster its EV manufacturing capabilities have included substantial investment deals aimed at attracting companies across the EV supply chain. These efforts underscore Ottawa's commitment to enhancing its industrial footprint in Ontario and solidifying its role in the global transition towards electric mobility.
