Canada Imposes 100% Surtax on Chinese EVs to Protect Automotive Industry
Canada has recently announced its plans to implement a 100% surtax on Chinese electric vehicles (EVs) starting from October 1. This surtax will be in addition to the existing 6.1% import tariff. The purpose of this move is to safeguard the country’s automotive industry, which employs over 125,000 individuals.
Protecting the Automotive Industry
The Canadian government believes that Chinese firms benefit from “unfair, non-market policies and practices,” which necessitates the imposition of the surtax. The surtax will apply to various electric and hybrid vehicles, including passenger automobiles, trucks, buses, and delivery vans.
Moreover, the government also plans to introduce a 25% surtax on steel and aluminum imports from China, effective October 15. Additional surtaxes may be implemented in critical sectors such as batteries, semiconductors, and solar products.
Aligning with International Measures
Canada’s decision to impose a surtax on Chinese EVs aligns with similar actions taken by the United States and the European Union. The Biden administration recently raised the tariff rate on Chinese electric vehicles from 25% to 100%. This coordinated effort aims to address the issue of unfair competition and protect domestic industries.
Limiting Incentives for Zero Emission Vehicles
Alongside the surtax, the Canadian government plans to restrict eligibility for zero emission vehicle incentives. These incentives will only be available for products manufactured in countries that have negotiated free trade agreements with Canada.
Supporting the Auto Industry
The measures taken by the Canadian government are intended to support the country’s auto industry, as well as its steel and aluminum producers. The automotive sector alone employs more than 125,000 people, while the steel and aluminum industry supports over 130,000 jobs.
By implementing these measures, Canada aims to level the playing field, protect its workers, and respond to the intentional overcapacity policies of China. The government believes that such policies pose a threat to the global EV industry.