Canada has put a 100% tax on electric cars from China starting October 1. This choice stems from worries about unfair trade that might hurt the global electric car market.
Also, from October 15, Canada will add a 25% tax on steel and aluminum from China.
Mary Ng, who handles trade for Canada, said these steps are needed to help Canadian workers and companies compete. She noted that current global trade rules often don’t guard against China’s unfair practices in this field.
The taxes will cover not just electric cars but also hybrid cars, trucks, and buses made in China. Canada’s government thinks China’s policies, which lead to making too many cars and not following labor and environmental rules put jobs and businesses in the electric car sector at risk worldwide and could slow Canada’s long-term economic growth.
This news comes after a similar move by the Biden team in May, which also put a 100% tax on electric cars from China. In July, the U.S. slapped a 25% fee on steel made abroad that passes through Mexico to dodge taxes on Chinese metals.
According to the Canadian government, over 125,000 job positions in Canada are supported through the export of auto manufacturing as well as over 130,000 in the sectors of steel and aluminum.
Following the implementation of tariffs, the Chinese embassy in Canada condemned the steps as a ‘trade protectionism’ that would negatively impact the consumers and businesses in Canada, delay Canada’s efforts towards renewable energy sources, and do nothing to fight climate change. The spokesperson for the embassy stated that it is the market that gives China the edge, not the government support hence overcapacity accusations are unfounded.
The volume of business turnover between Canada and China amounted to 76 billion US dollars in 2023, while Canada invested an appreciable amount of more than 63 billion US dollars in the purchase of Chinese products. In the first half of 2024, Canada purchased more than 34 billion dollars worth of vehicles and auto parts which is a 6.5 percent increase compared to the same period a year ago.
According to data obtained from the Port of Vancouver, the volume of car imports from China increased by 460% in 2023 compared to the previous year to 44,356 units, due in large part to Tesla exporting electric vehicles from its Beijing plant.
Research experts draw a linkage between the growth of the Canadian importation of Chinese passenger vehicles and the entry of this company into the Canadian market, as these vehicles formed part of the $2.64 billion worth of imports which exhibited a tremendous increase. However, most of these imports are Western models produced in China, as Chinese vehicle brands are still largely unavailable in Canada as of 2023.
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