In line with the United States, Canada announced a 100% tariff on electric vehicles made in China, including those produced by Tesla. Tesla shares fell 3% on Monday in response to the news.
To Beijing’s further outrage, the Canadian government announced a 100% tax on electric cars Made in China and from 25% on steel and aluminumaligning with Western allies to protect domestic manufacturers.
This measure of open trade war reflects that of the EU and especially that of USACanada’s closest trading partner, where the Biden administration introduced a 100% tariff on Chinese-made electric vehicles in May. The European Union, by contrast, plans to impose much lower tariffs on imports from China, particularly Tesla vehicles.
Canada introduces additional restrictions on Chinese imports
The decision was made after a three-day closed-door meeting which was attended by the U.S. National Security Advisor Jake SullivanCanadian Prime Minister Justin Trudeau and cabinet ministers in Halifax, Nova Scotia.
Canadian Prime Minister Justin Trudeau stressed that Ottawa would continue to work with the United States and its allies to ensure that consumers around the world are not unfairly penalized by the unfair trade practices of countries like China.
The new tariffs on electric vehicles, which include levies on certain hybrid vehicles The tariffs on passenger cars, trucks, buses and delivery vans will come into effect on October 1 and will be added to the existing 6.1% levy on imports from China. The additional levies on steel and aluminium will come into effect on October 15. The deputy prime minister Chrystia Freeland announced that Canada would also begin a 30-day consultation to study possible tariffs in other sectorssuch as batteries, solar products, chips and critical minerals.
100% Canadian tax on Teslas made in China
The 100% tax also will affect Teslas made in Chinaand shares of the world’s largest electric vehicle maker fell 3% on Monday. Vehicle identification codes indicate that compact sedan models Model 3 and Model Y Crossover were shipped from China to Canada, although the company has not disclosed specific numbers. The Canadian government has said automakers will not be affected if they move production from China to other countries.
In fact, Chinese electric vehicle manufacturers have yet to gain a significant market share in Canadawhere The main electric vehicles are the Chinese-made TeslasStatistics Canada data shows that the value of Chinese EVs imported from China to Canada amounted to C$2.2 billion (€1.97 billion) last year, up from C$100 million (€90 million) in 2022.
However, lThe Government’s main concern Canadian are Other Chinese manufacturers of VE, as BYDwhich plans to enter the market as early as 2025.
On the contrary, the European Commission recently updated its new levies on China, reducing an additional tariff on China-made Tesla EVs to 9%, down from the previously planned 20.8%. The EU concluded that Tesla received less subsidies from the Chinese governmentbenefiting mainly from below-market battery supplies, advantageous land use and income tax reductions for exporters in China.
China calls Canada’s measures “protectionism”
In response, the Chinese embassy in Canada issued a statement accusing Canada of ignoring World Trade Organization rules.
The statement also claimed that the rapid development of China’s electric vehicle industry and other sectors was the result of innovation, a comprehensive production and supply chain system, and competitive products, rather than relying on subsidies to gain competitive advantages. The embassy warned that “China will take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.”
China will raise the tariff issue with U.S. officials during its meeting this week with Chinese Foreign Minister Wang Yiaccording to Xinhua news agency.
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