Canada slaps 100 pct tariff on Chinese-made EVs, including BYD and Tesla

Canada has followed the lead of the United States and the European Union, and will slap a 100 per cent tariff on all Chinese-made electric vehicles (EVs), taking aim at what it says is an “intentional, state-directed policy of overcapacity” and poor labour and environmental standards.

The new tariffs, which will go into effect on October 1, 2024, will apply a 100 per cent surtax on all Chinese-made EVs – including all battery electric vehicles and certain hybrid passenger cars, trucks, buses, and delivery vans.

This new tariff will be piled on top of the existing 6.1 per cent import tariff that currently applies to EVs produced in China and imported into Canada.

A government spokesperson told Reuters that this new tariff would also apply to electric vehicles made in China by US EV company Tesla, and to its main competitor BYD, which is poised to launch into that market later this year.

The new tariff was announced alongside a 25 per cent surtax on Chinese imports of steel and aluminium products, which will go into effect on October 15, 2024.

“Canada is home to the talented workers, raw materials, clean electricity, and specialized production capabilities needed to build electric vehicles, and that is why our EV supply chain potential is ranked first in the world,” said Chrystia Freeland, deputy Prime Minister and minister of finance.

“Canadian workers and critical sectors, including steel and aluminium, however, are facing an intentional, state-directed policy of overcapacity, undermining the Canada’s ability to compete in domestic and global markets.

“That is why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and match measures taken by key trading partners.”

The announcement follows hot on the heels of similar tariffs on Chinese EV imports in both the United States and the European Union.

In May, the United States announced that it would increase the tariff rate on EV imports from China from 25 per cent to 100 per cent. The tariff increase was billed as an effort to “protect American workers and businesses from China’s unfair trade practices”.

However, the Biden-Harris administration is expected to announce the final implementation of these tariff increases – which also included Chinese imports of semiconductors, steel and aluminium, solar cells, and batteries, battery materials, and critical minerals – with many across US industry calling for the planned increases to be softened.

Similarly, the European Commission announced in June that it would begin to apply provisional countervailing (anti-subsidy) duties on Chinese-made EVs.

This was confirmed in August after a period of feedback, applying differing duty rates per company at a : 17.4 per cent for BYD, 19.3 per cent for Geely, 36.3 per cent for SAIC, 21.3 per cent for other cooperating companies, and a flat 36.3 per cent for all other non-cooperating companies.

Tesla was granted an individual duty rate of only 9 per cent.

As of writing, the European Union’s planned tariffs remain at the provisional stage and have not been finalised.

Unsurprisingly, China has repeatedly expressed its frustration at the slow drip of economic sanctions.

In May, a statement from Chinese foreign minister Wang Yi decried the United States’ decision to impose tariffs as “the most typical form of bullying in the world today!

“It shows that some people in the United States have reached the point of losing their minds in order to maintain their unipolar hegemony. The U.S.’s suppression of China does not prove that the U.S. is strong, but rather exposes that the U.S. has lost its self-confidence and is out of order.”