On Monday, August 27, Canada announced that it would apply a 100% import tax on electric vehicles manufactured in China, joining the U.S. and the European Union in levying duties due to concerns about unfair subsidies.

Electric vehicles (EVs) from China currently imported into Canada are manufactured by Tesla at the company’s Shanghai facility. After this announcement, there was a 100% tariff on all EVs (including Tesla) imported from China.

Prime Minister Justin Trudeau revealed on Monday that there would also be a 25% tariff on Chinese aluminium and steel. During a cabinet retreat in Halifax, Nova Scotia, Trudeau mentioned that countries like China have opted to give themselves an unfair advantage in the global market.

Earlier this summer, Trudeau’s government began a 30-day consultation period to address what Deputy Prime Minister Chrystia Freeland described as a deliberate attempt by Chinese companies to create a global surplus.

Canada’s action comes shortly after the United States and the European Commission announced their intentions to impose higher tariffs on Chinese electric vehicles. During a Sunday meeting with Trudeau and the cabinet minister at a cabinet retreat in Halifax, Nova Scotia, US national security advisor Jake Sullivan urged Canada to take similar actions.

Tesla is the only Chinese-made electric vehicle imported into Canada, produced at the company’s Shanghai facility. Freeland stated that Canada will collaborate with its allies in the United States and the European Union, emphasising the integrated nature of the North American auto sector.

She also assured that her government will prevent Canada from becoming a dumping ground for the oversupply of Chinese goods. President Joe Biden has expressed that Chinese government subsidies for electric vehicles and other consumer products result in Chinese companies not needing to make a profit, granting them an unfair advantage in global trade.

Chinese companies can sell electric vehicles for as low as USD 12,000. China’s solar cell plants and steel and aluminium mills possess enough capacity to meet a significant portion of global demand. Chinese officials argue that their production strategies maintain low prices and will aid in the transition to a green economy.

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