Canada is adding tariffs to imports of Chinese EVs, steel and aluminum
Summary
A 100% surtax will be applied to electric vehicles made in China, while imports of steel and aluminum products will be subject to a 25% surtax.
OTTAWA : Canada will slap hefty tariffs on imports of Chinese electric vehicles, steel and aluminum, positioning itself with allies including the U.S. to protect domestic manufacturing.
Finance Minister Chrystia Freeland on Monday unveiled a range of measures she said are aimed at leveling the playing field for Canada’s EV industry and steel and aluminum producers to protect them from unfair competition from Chinese companies.
From October, Canada will implement a 100% surtax on all Chinese made EVs, including electric and certain hybrid passenger cars, trucks, buses and delivery vans. The impost will be in addition to a “most-favored nation" tariff of 6.1% that is already applied to Chinese-produced EVs imported into Canada.
The government also intends to apply a 25% surtax on imports of steel and aluminum products from China beginning Oct. 15, which Freeland said seeks to protect Canadian workers and prevent Chinese goods from being diverted through Canada to other trading partners.
The two tariffs match measures introduced by the Biden administration in May, lifting the tariff on certain Chinese steel and aluminum products to 25% from up to 7.5% and the levy on electric vehicles to 100% from 25%. Other jurisdictions have followed, though not to the same degree as the U.S. The European Commission has determined the electric vehicle industry in China benefits from unfair subsidies and in July began applying provisional duties on Chinese-made EVs.
Freeland said Canadian workers and critical sectors face an intentional, state-directed policy of overcapacity that undermined the country’s ability to compete in domestic and global markets. “That is why our government is moving forward with decisive action to level the playing field, protect Canadian workers and match measures taken by key trading partners," she said.
Canada imported about $1.6 billion in Chinese electric vehicles in 2023, according to Chinese customs data reviewed by the Atlantic Council, a Washington-based foreign-policy think tank. Ottawa estimates the country’s auto industry directly supports more than 125,000 jobs, while the steel and aluminum sectors support more than 130,000 jobs across Canada.
On top of the tariffs, the government plans to make changes to which EVs qualify for rebate programs aimed at boosting sales of zero-emissions vehicles.
The Liberal government stopped short of matching certain other U.S. measures targeting China, including increased tariff rates applied to semiconductors imported from China, solar cells and batteries and battery parts. Freeland said the government will launch a 30-day consultation concerning such critical industries.
Ottawa plans to review the new measures within one year of their coming into force, and said the actions could be extended or supplemented by additional measures as needed.
China has emerged as the largest maker and exporter of EVs globally in recent years, and its steel and aluminum producing capacity has continued to grow despite softening demand. Canada’s government and leaders of trade partners accuse China of weak standards across its EV supply chain, including poor labor standards, a lack of environmental protections and trade policies that promote oversupply.
Write to Robb M. Stewart at robb.stewart@wsj.com
