The Trudeau government is considering imposing tariffs on Chinese electric vehicles, seeking feedback on potential rates and impact on affordability. The government intends to
,
Prime Minister Justin Trudeau’s government has published options it is considering to prevent Chinese-made electric vehicles from entering the Canadian market, including levy tariffs On stopping Chinese investment in new Canadian factories and imports.
According to a document released Tuesday, Trudeau’s government is only considering tariffs on finished vehicles. For example, the list of items that could be subject to tariffs does not include batteries or battery parts.
The paper was released as part of formal consultations Canada must carry out before imposing tariffs. These consultations, announced last week by Finance Minister Chrystia Freeland, will seek feedback from stakeholders, including labour unions and automotive industry groups, and will run until Aug. 1.
Also read: Canada’s EV tariff plan sparks debate over best approach
The consultation paper states that Canada’s EV industry is “at risk of being vulnerable due to the recent significant increase in exports of Chinese EVs to Canadian and global markets, enabled by inappropriate support by China through the use of a wide range of non-market policies and practices.”
The document says Chinese policies, including “extensive subsidies, disrupted supply chains of essential components, problematic or non-existent labor and environmental standards, and other measures to artificially lower production costs, are leading to significant overcapacity in Chinese EV production.”
The paper does not specify potential tariff rates, but seeks feedback on tariff rates for different vehicle categories. It also seeks comments on what impact tariffs might have on the affordability of electric vehicles in general.
Canada follows its allies in imposing tariffs on Chinese electric vehicles
In another section, the paper considers the possibility that “Chinese companies may seek to establish facilities to manufacture electric vehicles within Canada in an effort to access the North American market in the wake of potential tariff measures.”
The document seeks feedback on whether “additional actions are needed, such as additional policy guidance, monitoring, or restrictions related to transactions and investments from Chinese sources in the Canadian EV supply chain.”
Also read: Tesla slips, while BYD surges 21%, narrowing gap
Two other areas have been outlined for feedback. The first is whether Canada should declare Chinese-made EVs ineligible for federal consumer incentives. The second is on data privacy and security considerations for connected vehicles and related infrastructure.
In considering tariffs and other measures, Canada is keeping pace with its allies. The United States this spring unveiled plans to nearly quadruple U.S. tariffs on Chinese-made electric vehicles, taking the final rate to 102.5 percent. The European Union also plans to raise tariffs, pushing these duties up to 48 percent on some vehicles.
Also read: Toyota plans to build electric vehicles with advanced automated driving for the Chinese market
Although the value of Chinese electric vehicles imported by Canada has increased recently, there has been little activity from Chinese domestic automakers so far.
The majority of Canada’s electric vehicle imports from China are vehicles from Tesla Inc., produced at a Shanghai factory. Freeland would not comment on whether tariffs could apply to those vehicles.
First Publication Date: July 03, 2024, 09:37 AM IST