Canada is set to follow the United States in imposing new tariffs on electric vehicles built in China in a bid to prevent these cars from gaining a foothold in the North American market.
Prime Minister Justin Trudeau presented the plan at the federal cabinet retreat in Halifax on Monday, promising to raise import tariffs on Chinese-built electric vehicles to 106.1 per cent on Oct. 1, from 6.1 per cent previously.
Tariffs on Chinese-made steel and aluminum products will increase to 25 percent on October 15, with the final list of affected products expected to be released on October 1.er october.
“We are transforming Canada’s auto sector to become a global leader in building the vehicles of tomorrow, but players like China have chosen to give themselves an unfair advantage in the global marketplace, compromising the security of our essential industries and displacing dedicated Canadian auto and metal workers,” said Mr. Trudeau.
“So we are taking steps to address that,” he added.
Emerging brands
Chinese brands aren’t a major player in Canada’s electric vehicle market right now, but imports from China exploded last year after Tesla shifted its focus from U.S. factories to its Shanghai manufacturing plant for Canadian sales.
Chinese electric vehicle giant BYD, which stands for Build Your Dreams, created a Canadian business entity last spring and has indicated it intends to try to enter the Canadian market as early as next year.
It has grown exponentially in Europe, where new tariffs on Chinese-built electric vehicles are also planned, although they would be more than half of Canadian and U.S. rates if the European bloc approves them in October.
A senior government official who briefed reporters at the cabinet retreat said the government was in talks with Tesla to move cars destined for the Canadian market from China to its other factories.
The American Way
U.S. President Joe Biden quadrupled tariffs on 100% Chinese-built electric vehicles in May, citing Beijing’s unfair subsidies to Chinese electric vehicle makers.
The U.S. Commerce Department is also investigating national security concerns related to internet-connected vehicles from China and other countries.
The United States raised tariffs on a long list of other Chinese products in May, including solar cells, computer chips, medical equipment and lithium-ion batteries.
To impose tariffs, Canada must undertake a consultation process, which it did for electric vehicles, steel and aluminum in July.
Trudeau said the government is considering other measures, including imposing tariffs on computer chips and solar cells, to protect Canadian workers from “unfair” practices by China.
In late June, Deputy Prime Minister and Finance Minister Chrystia Freeland announced the launch of a process to impose new import taxes on electric vehicles built in China and accused Beijing of “intentionally creating overcapacity and excess supply.”
“We are here because we want to protect our workers. We want to protect the industry, we want to protect the generational investments that we have seen,” said Minister of Innovation, Science and Industry François-Philippe Champagne on Monday in Halifax. “We know that today, Canada is the envy of the world in the production of electric vehicles. We have built a most complete supply chain.”
Canadian unions satisfied
The announcement was well received by the Metalworkers union, affiliated with the FTQ, which represents thousands of workers in this industry in Quebec.
“It’s important for jobs in steel and aluminum in Quebec, but it’s also important from an environmental point of view. In fact, the aluminum and steel produced here have a much lower carbon footprint than those produced in China. Preventing Chinese dumping also means cleaning up the carbon footprint,” commented the Quebec director of the Steelworkers union, Dominic Lemieux.
Nine of the 10 Canadian aluminum smelters are located in Quebec and produce aluminum using hydroelectric energy, the Metalworkers union said in a press release.
With Lia Lévesque