TORONTO (AP) — The Canadian government announced Monday it will impose a 100% tariff on imports of electric vehicles made in China, matching U.S. tariffs and following similar plans announced by the European Commission.
The announcement comes after encouragement from U.S. national security adviser Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau and cabinet ministers on Sunday. Sullivan is making his first visit to Beijing on Tuesday.
Trudeau said Canada would also impose a 25% tariff on Chinese steel and aluminum.
“Players like China have chosen to give themselves an unfair advantage in the global market,” he said.
China did not immediately respond.
Chinese officials are expected to raise concerns about U.S. tariffs with Sullivan as Beijing continues to repair its economy from the COVID-19 pandemic. In May, U.S. President Joe Biden imposed significant new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment.
“The United States believes that a united front and a coordinated approach on these issues benefits all of us,” Sullivan told reporters Sunday.
Biden said Chinese government subsidies for electric vehicles and other consumer goods ensure Chinese companies do not have to make profits, giving them an unfair advantage in global trade.
Chinese companies can sell electric vehicles for as little as $12,000. Chinese solar cell factories and steel and aluminum mills have enough capacity to meet much of the world’s demand. Chinese officials say their production keeps prices low and would help the transition to a green economy.
“We’re acting in parallel with other economies around the world that recognize that this is a challenge that we all face,” Trudeau said of the new tariffs. “Unless we all want to find ourselves in a race to the bottom, we have to stand up.”
Deputy Prime Minister Chrystia Freeland said Canada would also launch a 30-day consultation on possible tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals and solar panels.
“China is pursuing a deliberate policy of overcapacity and oversupply, which is designed to cripple our own industry,” Freeland said. “We simply will not allow that to happen to our electric vehicle sector, which has shown so much promise.”
The only Chinese-made electric vehicles currently imported into Canada are Tesla’s, manufactured at the company’s factory in Shanghai.
“Canada has had to side with the United States, given the economic integration that we have with the United States. Over 75 per cent of our exports go to the United States,” said Guy Saint-Jacques, a former Canadian ambassador to China. “That reflects the fear that the next president of the United States will be Donald Trump. So they know that we have to be more or less aligned with all of that.”
Saint-Jacques said Canada can expect retaliation from China in other sectors, adding that barley and pork are candidates because the Chinese can get them from other countries.
“China will want to send a message,” he said.
