Canada considers the possibility of increasing tariffs on Chinese-made electric vehicles after the US imposed tariffs of more than 100%.
Canadian Trade Minister Mary Ng said she is “considering this issue very carefully” along with open dialogue with the US. Currently, Chinese electric vehicles imported into this country are only subject to a tax rate of about 6%. Canadian consumers also enjoy a federal subsidy program when purchasing foreign-made electric vehicles.
Canada’s decision comes after US President Joe Biden sharply increased tariffs on $18 billion of Chinese imports. In particular, “made in China” electric cars had their taxes increased four times, to a total of 102.5%.
Canadian Minister of Economic Development, International Trade and Export Promotion Mary Ng speaks at an event in Ottawa, Ontario, Canada on January 31, 2023. Image: Reuters
Talk to CBC News Network, Canadian Industry Minister François-Philippe Champagne said Ottawa is “considering all measures” after the US announced it would increase tariffs on Chinese electric vehicles and other related goods. According to him, the possibility of this country imposing similar tax rates cannot be ruled out.
“It’s fair to say that everything is on the table to protect the industry and workers. We are working in sync with the US,” he said. The Industry Minister emphasized that Canada will never be a “back door” for China to access the North American electric vehicle market.
President of the Auto Parts Manufacturers Association Flavio Volpe supported it, saying similar taxes must be implemented to not be out of step with the US after the White House built the tariff wall. “We need appropriate policies to strengthen the North American auto supply chain,” he stated.
Similar to the US, electric vehicles still account for a small share of the Canadian car market. Last year, 185,000 electric and hybrid vehicles started rolling in the country, an increase of nearly 50% compared to 2022, but still only accounting for 11% of the total number of newly registered vehicles.
Among Asian countries exporting electric vehicles to Canada, Japan and South Korea dominate. China’s domestic brand has fared better in America’s neighbor Mexico, where low-cost cars from BYD and Anhui Jianghuai Automobile have been popular over the past decade.
Meanwhile, Chinese-made electric vehicles imported into Canada are mostly Tesla cars produced in Shanghai, amounting to 44,400 units last year. Domestic auto industry enterprises are not satisfied with this.
Flavio Volpe says consumers can buy a Tesla made in Shanghai and receive a $5,000 subsidy funded by taxpayers – including Canadian companies competing with Tesla.
“We’ve raised this issue publicly and privately and done everything we can to get someone to shut the door. And it’s still open (to Chinese-made electric vehicles) and only getting attention in the US,” he said.