Canada is set to impose a 100% tariff on imports of electric vehicles (EVs) made in China, following similar moves by the US and the European Union.
The decision, effective October 1, also includes a 25% duty on Chinese steel and aluminum, a clear response to accusations that China unfairly subsidizes its EV industry, tipping the scales in the global market.
Canadian Prime Minister Justin Trudeau emphasized that Canada is committed to becoming a global leader in the automotive sector but argued that China’s subsidies give its carmakers an “unfair advantage” on the world stage.
In a swift rebuttal, China labeled the tariffs as “trade protectionism,” claiming they violate World Trade Organization rules.
The Chinese embassy in Canada stated that the rapid rise of its EV industry is due to “persistent technological innovation, well-established industrial and supply chains, and full market competition,” rather than government support.
This escalating trade tension underscores the broader struggle for dominance in the EV sector, with Canada targeting the business practices of a major global player.
The tariffs will also impact Tesla’s vehicles manufactured in Shanghai, a move that might prompt the automaker to shift its Canadian imports to factories in the US or Europe.
Mark Rainford, a China-based automotive analyst, noted that Tesla is likely to lobby the Canadian government for tariff relief.
If unsuccessful, the company might reconfigure its supply chain given that Canada ranks as Tesla’s sixth-largest market this year.
China remains Canada’s second-largest trading partner, but the rift over EVs could strain ties further.
The US previously announced a quadrupling of tariffs on Chinese EVs, while the EU has set duties as high as 36.3% on imports from China.
This intensifying trade battle reflects a global scramble to secure a foothold in the rapidly growing EV industry.
Amid this backdrop, Canada has secured multi-billion-dollar deals with European carmakers, positioning itself as a key player in the global EV landscape.
But as these new tariffs loom, the international business community watches closely to see how these policies will reshape trade dynamics and market competition.
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