Canada opens public consultation on Chinese EV tariffs
The Canadian government opens its 30-day public consultation period on imposing tariffs on imports of Chinese electric vehicles (EVs) today.
It follows recent announcements by both the US and the EU on similar tariffs on Chinese EVs. US President Joe Biden has announced that Chinese EVs will face a 100% tariff, while European Commission President Ursula von der Leyen announced variable import tariffs of up to 38%, depending on the manufacturer.
Washington and Brussels have repeatedly accused China of producing EVs and other green energy technologies at overcapacity leveraging unusually high state subsidies. This is flooding Western markets with undervalued goods in this sector, undercutting competition. Beijing has denied accusations of overcapacity and instead pointed to Western companies having lost their competitive edge. Nonetheless, Chinese state subsidies are very generous, with some estimates putting China’s annual industrial subsidies at 5% of GDP.
Following its public consultation period, Canada is likely to follow the US and the EU in imposing EV tariffs. This could also aid in Canada’s ambitions in becoming a major part in global EV supply chains. The result of the public consultations will determine the severity of the tariffs, although this cautious approach points to Ottawa likely choosing less radical tariffs than the US’s 100%. Instead, it may choose tariffs more in line with the EU’s approach of aiming for tariffs to offset state subsidies, in line with WTO rules.
