Canada appears set to block the establishment of Chinese electric vehicle factories within its borders, presumably a regulatory move against China. According to Bloomberg on the 3rd, Canadian Prime Minister Justin Trudeau plans to prevent China from setting up electric vehicle factories or making new investments in Canada following the imposition of tariffs on Chinese-made EVs.
On the same day, the Canadian Department of Finance began a public consultation by posting a policy response to unfair Chinese trade practices in electric vehicles announcement on its website. The announcement stated that the Trudeau government plans to impose tariffs only on completed Chinese-made electric vehicles. However, Chinese-made batteries and battery items are not included in the tariff.
The Department of Finance wrote that the Canadian EV market is at risk due to China’s anti-dumping practices, which have significantly increased Chinese EV exports. They criticized China for providing substantial subsidies to the supply chain of essential parts and artificially lowering production costs, resulting in the overproduction of Chinese EVs.
They expressed concern about China’s plans to establish EV factories in Canada to gain access to the North American market. They are seeking opinions on whether additional measures, such as limiting China’s Canadian EV market investment, are necessary.
However, the document did not specify the exact tariffs. Instead, it requested consultation on how to apply tariff rates depending on the type of vehicle. It also sought opinions on how tariffs could impact the Canadian EV market. The Canadian Auto Industry Association has until the 1st of next month to submit its opinion. They had previously called for high tariffs on imported Chinese vehicles.
Bloomberg interpreted this move as aligning with allied countries such as the United States and the European Union (EU). Earlier this year, the U.S. announced plans to nearly quadruple tariffs on Chinese-made EVs, raising the final tariff rate to 102.5%. The EU also plans to raise tariffs, imposing up to 48% on some vehicles.
However, most EVs Canada imports from China are vehicles Tesla produces at its Shanghai factory. Canadian Deputy Prime Minister Chrystia Freeland did not mention whether these vehicles would be subject to tariffs.
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