Following the US, Canada imposes a 100% tariff on Chinese electric vehicles

OTTAWA, Aug 26 (Reuters) – Canada said on Monday it would follow the United States in imposing 100% tariffs on imports of Chinese electric vehicles and 25% tariffs on steel and aluminum imports from China.

“I think we all know that China doesn’t play by the same rules,” he told reporters. Fees will be levied from October 1 this year.

“What’s important about this is that we’re doing it in alignment and in line with other economies around the world,” Trudeau said on the sidelines of a three-day closed-door cabinet meeting in Halifax, Nova Scotia.

The Chinese Embassy in Ottawa was not immediately available for comment.

Trudeau said Ottawa will continue to work with the United States and other allies to ensure consumers around the world are not unfairly penalized by non-market practices by countries like China.

Ottawa is looking at additional punitive measures, such as tariffs on chips and solar cells, Trudeau said, without giving details.

Ottawa is trying to position Canada as a key part of the global EV supply chain, and is under pressure from the domestic industry to counter China.

Tesla

China is Canada’s second largest trading partner, although it lags behind the United States. Data from Canada’s largest port in Vancouver showed imports of automobiles from China at the port increased 460% annually in 2023, when Tesla began shipping Shanghai-made EVs to Canada.

Tesla did not disclose Chinese exports to Canada that would begin in the first half of 2023. However, vehicle identification numbers showed that the Model 3 compact sedan and Model Y crossover models were being exported to Canada from its Shanghai Gigafactory.

“In response to the tariffs, I expect Tesla to shift its logistics and export autos from the U.S. to Canada,” said Seth Goldstein, equity strategist at Morningstar.

“If Tesla has to export vehicles from its high-cost manufacturing base in the U.S. to Canada, the market could react to the tariffs and weigh the potential profit impact,” Goldstein said, referring to the stock’s decline.

The EU imposed a new reduced surcharge of 9% on Tesla, lower than the 36.3% levied on other Chinese EV imports.

Canada has signed billions of dollars worth of deals to develop its manufacturing hub to bring in the best European automakers in all parts of the EV supply chain.

“We feel vindicated and motivated. We will now get the business to defend our market with great Canadian innovation and determination,” Auto Parts Manufacturers Association president Flavio Volpe said by email.

The implementation of the US tariffs has been delayed until September and there is a possibility that the duties scheduled for this week will be softened.

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Akash reports on technology companies, electric vehicle companies and the aerospace industry in the US. His reporting usually appears in the autos and transportation and technology sections. He holds a Masters in Conflict, Development and Security from the University of Leeds. Akash’s interests include music, football (soccer) and Formula 1.