Government to slap 100 per cent tariff on Chinese-made EVs

The Canadian government announced a series of measures to, what it said, level the playing field for Canadian workers and allow Canada’s EV industry and steel and aluminum producers to compete in domestic, North American and global markets, including implementing a 100 per cent surtax on all Chinese-made EVs.

The government’s 100 per cent tariff on Chinese-made EVs is effective Oct. 1 and includes electric and certain hybrid passenger automobiles, trucks, buses and delivery vans. This surtax will apply in addition to the Most-Favoured Nation import tariff of 6.1 per cent that currently applies to EVs produced in China and imported into Canada.

The government also plans to apply a 25 per cent surtax on imports of steel and aluminum products from China, effective Oct. 15. This measure aims to protect Canada’s workers from China’s trade policies and to prevent trade diversion resulting from recent actions taken by Canadian trading partners. An initial list of goods is being released today for public comment. The final list of goods subject to the surtaxes will be announced by Oct. 1, with the surtaxes taking effect on Oct. 15. The surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force.

The Canadian government will also launch a second 30-day consultation concerning other sectors critical to Canada’s future prosperity, including batteries and battery parts, semiconductors, solar products and critical minerals. A consultation notice will be released in the coming days to help inform of any further government action.

Lastly, the federal government is announcing its intention to limit eligibility for the Incentives for Zero-Emission Vehicles (iZEV), the Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV), and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to products made in countries which have negotiated free trade agreements with Canada.

The Canadian Steel Producers Association and Aluminium Association of Canada applauded the move, saying in a joint statement, “Our industries strongly support and welcome today’s announcement by the Government of Canada that recognizes the strategic importance of steel and aluminium to Canada’s economic security interests.

“By taking this proactive approach of tariffs directed towards China, Canada is protecting our workers, families and the communities that these vital industries support. Canada is also taking the important step of aligning with its CUSMA trading partners, protecting fortress North America and refusing to be a point of entry for unfairly traded and high carbon steel and aluminium imports.”

The Canadian Marine Industries and Shipbuilding Association (CMISA) also approved of the move, but said the same decisive measures must be extended to Chinese-built ships, which present an even greater strategic and ethical threat.

“China’s shipbuilding industry operates under the doctrine of Civil-Military Fusion whereby commercial ship exports are subsidized to strengthen the country’s military capabilities,” CMISA said in a release.  “The very shipyards that produce ferries and cargo vessels for the global market are also used to construct warships for the Chinese People’s Liberation Army Navy (PLAN), fueling its rapid and aggressive naval expansion. As China’s navy continues to grow, it increasingly uses its fleet to challenge Canadian interests and those of our allies in regions extending even to our own Arctic waters.”

CMISA is recommending the imposition of a 100 per cent surtax on all Chinese-built ships imported into Canada and demands a clear prohibition on any government entity or Crown corporation from acquiring or leasing Chinese-built vessels.

The federal government intends to review these measures announced today within a period of one year from their entry into force.