Canada is engaging in “protectionism” by imposing 100% tariffs on imports of electric vehicles made in China, accuses the Chinese government, which says it is “strongly dissatisfied” with Prime Minister Justin Trudeau’s intention to harmonize Canada’s import fees with those of the United States.
In a statement released Tuesday, China’s Ministry of Commerce said Ottawa’s planned tariffs on Chinese-made electric vehicles will disrupt the stability of global supply chains, seriously impact China-Canada economic and trade ties, and harm the interests of businesses in both countries.
“China is strongly dissatisfied with and firmly opposes this measure,” the statement read.
“Canada says it supports free trade and the multilateral trading system based on the rules of the World Trade Organization (WTO), but it has flagrantly violated WTO rules by imposing unilateral tariff measures, blindly following other countries. This is typical trade protectionism,” the department added.
The ministry urged Canada to “immediately correct its bad practices” and assured that Beijing will take all necessary measures to defend the rights and interests of Chinese companies.
The federal government has announced it will impose 100 per cent tariffs on electric vehicles made in China after being urged to do so by U.S. national security adviser Jake Sullivan, who met with the cabinet’s retired cabinet meeting in Halifax on Sunday.
Sullivan then began his first visit to Beijing on Tuesday, where Chinese officials are likely to raise concerns about U.S. tariffs as Beijing continues to try to rebuild its economy after the COVID-19 pandemic.
In May, US President Joe Biden imposed significant new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminium and medical equipment.
A Chinese Foreign Ministry spokesman urged Canada on Tuesday not to “politicize economic and trade issues.”
“China’s thriving electric vehicle industry is the result of continuous technological innovation, a well-established industrial and supply chain and full market competition,” said ministry spokesperson Lin Jian.
In addition to electric vehicles, Trudeau announced Monday that Canada will also impose a 25% tariff on imports of Chinese steel and aluminum.
“Players like China have chosen to give themselves an unfair advantage in the global market,” he argued.
Few companies present
The Chinese-made electric vehicles currently imported into Canada come mainly from Tesla, which is built in Shanghai. The American company could avoid the new tariffs by sourcing from factories in the United States or Germany, however.
Chinese brands are not yet present in Canada. However, Chinese manufacturer BYD, which specializes in electric vehicles, created a Canadian business entity in the spring and indicated that it intends to try to enter the Canadian market as early as next year.
Chinese companies can sell electric vehicles for as little as about $16,000. Chinese solar cell factories, steel mills and aluminum smelters have enough capacity to meet much of the world’s demand. Chinese officials say their production keeps prices low and would help the transition to a green economy.
Deputy Prime Minister Chrystia Freeland announced that Canada would also launch a 30-day consultation on possible tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals and solar panels.
“China is pursuing a deliberate, state-led policy of overcapacity and oversupply designed to cripple our own industry,” Freeland said.
“We simply will not allow that to happen to our electric vehicle sector, which has shown so much promise.”