Recently, the Canadian government officially announced a series of trade policy adjustments for Chinese products. These measures are undoubtedly a response to similar policies recently introduced by the United States and the European Union.
The Canadian government announced on August 26 that it plans to impose a 100% additional tax on all electric vehicles made in China starting October 1 this year.
This 100% additional tax will be levied in addition to the current 6.1% tariff Canada imposes on electric vehicles made in China.
This policy is not limited to pure electric vehicles, but also covers plug-in hybrid vehicles, gasoline-electric hybrid vehicles and fuel cell vehicles, and covers a variety of models such as passenger cars, trucks, buses, vans, etc.
This measure will apply to the following products imported from China. The following description is for illustrative purposes only, and the scope is determined by the tariff item in column 1.
Canada imposes additional taxes on Chinese-made electric vehicles:
Currently, Chinese-made electric vehicles exported to Canada mainly come from Tesla's Shanghai factory. As a U.S. company, Tesla can supply Canada through its U.S. or German factories, thus avoiding the impact of this tariff.
In comparison, electric vehicles from other Chinese brands have only shallow market penetration in Canada.
However, recent news has spread that BYD plans to enter the Canadian market and has met with Canadian dealers to discuss opening dealerships. Therefore, Canada's tariff increase is more like a preventive measure aimed at curbing the entry of Chinese-made electric vehicles into its market.
Data shows Canada's imports of cars from China have grown significantly since Tesla began shipping electric vehicles made in Shanghai to Canada. In 2023, vehicle imports through the Port of Vancouver increased by 460% year-on-year to 44,356 vehicles.
Regarding Canada's increase in tariffs, Cui Dongshu, secretary-general of the China Automobile Industry Analysis Organization Passenger Car Association, said that this move will have a huge impact on Chinese electric vehicles entering the Canadian market and is almost equivalent to closing the market door. But he also pointed out that companies can build factories overseas and produce electric vehicles in other regions before entering the Canadian market.
The Canadian Broadcasting Corporation (CBC) pointed out that Canada’s move is to some extent following the footsteps of the United States, which has asked Canada to be consistent with its tariffs on electric vehicles and other products from China.
In addition to the electric vehicle field, the Canadian government also announced that starting from October 15, it will impose a 25% tariff on steel and aluminum products produced in China. This series of measures demonstrates Canada’s stance on trade policy.
Canada imposes additional taxes on steel and aluminum products imported from China:
In addition, not only electric vehicles and steel and aluminum products, Canadian Deputy Prime Minister Freeland said that Canada will also hold a 30-day consultation on the possible imposition of tariffs on Chinese batteries, battery components, semiconductors, key minerals, metals, and solar panels.
In response, the spokesperson of the Chinese Embassy in Canada responded quickly, expressing strong dissatisfaction and firm opposition to the Canadian move, believing that this move is harmful to others and not beneficial to itself, and promised to take all necessary measures to safeguard the legitimate rights and interests of Chinese companies.
The spokesperson of the Ministry of Foreign Affairs also answered reporters' questions regarding Canada's proposed restrictive measures on Chinese electric vehicles and other products, further demonstrating China's position and attitude.
Data shows that Canada's economic development mainly depends on the United States, its largest trading partner, especially in the automotive industry. Canada produces about 1.5 million cars each year, and most of them are shipped to the US market. There is no news yet whether Canada's tariff increase will be applied equally to Tesla and other European and American electric vehicles.
Before Canada announced the tariff increase, US President Biden announced in May this year that the "Section 301" tariffs imposed on China during the Trump administration would be maintained, while tariffs on China's "target strategic products" would be significantly increased.
Among them, the tariffs on Chinese electric vehicles will be tripled to 100%, the tariffs on semiconductors and solar cells will be doubled to 50%, and a new tariff of 25% will be imposed on other strategic commodities such as lithium batteries and steel.
In addition, on August 20, local time, the European Commission disclosed to relevant parties the draft decision on the final anti-subsidy tax on pure electric vehicles imported from China.
Slight adjustments were made to the proposed tax rates: BYD 17.0%; Geely 19.3%; SAIC Group 36.3%; other partner companies 21.3%; all other non-partner companies 36.3%; It was decided to apply a separate tariff rate to Tesla as an exporter to China, which is currently set at 9%; The European Commission also decided not to impose anti-subsidy duties retroactively.
