Canada to impose 100% tariff on Chinese electric vehicles, following US and EU Lead

Ottawa: Canada announced it will impose a 100 percent tariff on imports of China-made electric vehicles (EVs) starting October 1, aligning with similar actions taken by the United States and European Union. Additionally, a 25 percent duty will be applied to Chinese steel and aluminium imports from October 15.

The move comes as Canada and its Western allies accuse China of subsidising its EV industry, granting Chinese manufacturers an unfair advantage in the global market. Canadian Prime Minister Justin Trudeau emphasised that the decision is part of Canada’s efforts to position its automotive sector as a global leader in next-generation vehicles. However, China has criticised the tariffs, labelling them as "trade protectionism" that contravenes World Trade Organization rules.
"Actors like China have chosen to give themselves an unfair advantage in the global marketplace," Trudeau stated, justifying the tariffs as necessary to protect Canada’s automotive sector.

In response, a spokesperson from China’s Commerce Ministry condemned the tariffs, arguing they undermine the global economic system and violate trade rules. The spokesperson urged Canada to "immediately correct its erroneous practices."

China, which is Canada's second-largest trading partner after the US, has seen its EV industry rapidly grow, securing a significant share of the global market. Tesla, which manufactures vehicles in Shanghai, is among the companies affected by the new tariffs. Industry observers, like Mark Rainford, suggest Tesla may lobby the Canadian government for exemptions, or shift its Canadian imports to factories in the US or Europe.

Earlier this month, the EU reduced its planned extra tariffs on China-made Teslas after further investigation, a move that reflects the ongoing complexities in international trade involving Chinese EVs.While Chinese car brands like BYD are not yet common in Canada, they are taking steps to enter the market. Meanwhile, Canada is making significant investments with major European carmakers to solidify its role in the global EV industry.