In a significant escalation of trade tensions between Western countries and China, Prime Minister Justin Trudeau said on Monday that Canada would impose 100 percent tariffs on Chinese electric vehicles, joining the United States and the European Union in protecting domestic car production.
The move aligns Canada’s automotive policy with that of the United States, the market for the vast majority of Canadian-made vehicles where President Biden in May announced 100 percent tariffs on Chinese electric cars. And it also appears to be a form of insurance for the tens of billions of dollars in subsidies that Canadian governments have committed for the development of electric vehicle and battery factories being built in the country by Honda, Stellantis, Volkswagen, General Motors, LG and others.
In addition, Canada will also impose a new 25 percent tariff on Chinese steel and aluminum. The tariffs will most likely worsen the country’s rocky relations with China and could raise the possibility of retaliation by the Chinese government against Canadian agricultural exports.
“I think we all know that China is not playing by the same rules,” Mr. Trudeau told reporters on Monday in Halifax, Nova Scotia. “What is important about this is we’re doing it in alignment and in parallel with other economies around the world.”
Canada opened public consultations on the tariffs at the beginning of July. The 100 percent tariff on Chinese electric vehicles will go into effect on Oct. 1.
The new U.S. tariffs are expected to begin by the end of August. And the European Union has said that, at the end of October, it would impose additional tariffs of 9 percent to 36.3 percent on Chinese electric cars, depending on the manufacturer, beyond the standard 10 percent tariff it already levies on imported vehicles.