Canada to Impose 100% Tariff on Chinese Electric Vehicle Imports

Canadian Prime Minister Justin Trudeau announced on Monday that a 100% tariff will be imposed on electric vehicles (EV) imported from China, starting on October 1.

The measure on Chinese-produced vehicles is similar to the one announced by the United States in May to protect American businesses and workers.

Trudeau also included a 25% tariff on imported aluminum and steel from the country. According to The Guardian, he acknowledges “China’s intentional, state-directed policy of over-capacity” and unfair market practices.

“I think we all know that China is not playing by the same rules,” said the Prime Minister to reporters in a closed-door cabinet meeting in Halifax. “What is important about this is we’re doing it in alignment and in parallel with other economies around the world.”

According to the BBC, the European Union also raised tariffs for Chinese EVs from 17.4% to 37.6% in July, following the U.S. lead.

Canada made a significant move, as China is the country’s second-largest trading partner after the United States. According to recent data, EV imports from China increased by 460% in 2023.

Trudeau didn’t clarify if the new measure will affect American companies like Tesla, which also produces its vehicles in China and has been shipping cars from Shanghai to Canada—part of the reason why EV import numbers have jumped.

“In response to the tariffs, I would expect Tesla would shift its logistics and potentially export autos to Canada from the US,” Seth Goldstein, equity strategist at Morningstar, told The Guardian.

Canadian producers feel relieved. “We feel vindicated and motivated. Let’s now get to the business of defending our market with the best of Canadian innovation and resolve,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, to The Guardian via email.

China hasn’t shared public statements about this measure yet, and many wonder about the Chinese government’s reaction.