China sues Canada for imposing electric vehicle tariffs

From October 1, the 100% import tax that Canada imposes on electric vehicles manufactured in China, including gasoline-electric vehicles, trucks and buses, will take effect. This policy was announced at the end of August. Canada will also impose a 25% tax on some aluminum and steel products in this country from October 22.

China’s Ministry of Commerce said that Canada had violated the rules of a market economy and fair competition, impairing economic and trade cooperation between the two countries. This could disrupt and distort global industrial production and supply chains.

This agency urges Canada to review bilateral economic and trade relations and comply with WTO regulations. “China will take all necessary measures to protect the legitimate rights and interests of domestic enterprises,” the Ministry of Finance said.

In August, China also filed a lawsuit with the World Trade Organization (WTO) because of the import tax that the European Union (EU) imposed on its electric vehicles. Beijing said it had used the WTO’s dispute settlement mechanism “to protect the rights and interests of the electric vehicle industry, as well as protect global cooperation in the green transition”.

On June 12, the EU announced that it would impose an anti-subsidy tax of 17.4-37.6% on electric vehicles imported from China, instead of the general level of 10% as before. This bloc believes that Chinese electric vehicles unfairly benefit from government subsidies. Beijing affirms that its supports are in accordance with WTO regulations.

By August 21, Europe reduced import taxes for Tesla electric cars made in China and many companies such as BYD, Geely, and SAIC. The two sides are still negotiating this tax policy.

Before Europe, the US in May also announced an increase in tariffs on Chinese electric vehicles from 27.5% to 102.5%. US officials believe that this will create a level playing field for automakers and American workers.