Canada will impose an additional 100 percent tariff on EVs made in China starting October 1, bringing the overall rate up to 106.1 percent.
Canada will impose additional tariffs on electric vehicles (EVs) from China, following moves by the United States and the European Union.
Canada's Department of Finance announced on August 26 that starting October 1, 2024, it will impose an additional 100 percent tariff on all EVs manufactured in China.
Currently, the tariff applied to China-made EVs exported to Canada is 6.1 percent. When the additional tariffs come into effect, the rate they face will rise to 106.1 percent.
On August 27, China expressed its dissatisfaction and opposition to Canada's decision.
Canada's following the lead of individual countries and announcing that it will take unilateral measures to impose additional tariffs is a typical trade protectionist approach, China's Ministry of Commerce (MOFCOM) said in a question-and-answer session.
Canada's move will disrupt the stability of the global industrial supply chain, seriously undermine the global economic system and economic and trade rules, and seriously impact China-Canada economic and trade relations, the MOFCOM said.
It will harm the interests of enterprises in both countries, affect the welfare of Canadian consumers, and undermine Canada's green transformation and global efforts to combat climate change, according to the Q&A.
China urges Canada to immediately correct the practice and said it will take all necessary measures to defend the legitimate rights and interests of Chinese enterprises, according to the Q&A.
The number of China-made EVs currently exported to Canada is small, with Tesla (NASDAQ: TSLA) being the main contributor.
The value of Chinese EVs imported into Canada soared to C$2.2 billion ($1.6 billion) last year from less than C$100 million in 2022, Bloomberg said in an August 26 report, citing data from Statistics Canada.
The surge in the number of cars arriving at the Port of Vancouver from China came after Tesla began shipping Model Y cars from its Shanghai plant to the port of Vancouver, the report noted.
However, the Canadian government's main concern is not Tesla, but the prospect of cheap cars made by the Chinese automaker eventually hitting the market, the report said.
Canada launched a 30-day consultation on July 2 to discuss imposing restrictions, including additional tariffs, on EVs imported from China.
Canada's move follows measures by the US and the European Union to impose restrictions on Chinese EVs.
The US government announced plans in May to nearly quadruple tariffs on Chinese-made EVs, with a final rate as high as 102.5 percent.
On August 20, the European Commission announced new proposed tariffs for EVs from China, with Tesla at 9 percent, far lower than local Chinese carmakers.
While Chinese carmakers currently have a small footprint in Canada, some companies are considering entering the market.
BYD (HKG: 1211, OTCMKTS: BYDDY) was looking to enter the Canadian auto market, Reuters said in a July 30 report citing a regulatory filing.
It was unclear when representatives from BYD Canada, the Canadian subsidiary of the Chinese new energy vehicle (NEV) maker, would meet with government officials, the report noted.
EU unveils new proposed tariffs for EVs from China, 9% for Tesla
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