Canada wants to impose customs duties on Chinese electric vehicles

Canada wants to impose customs duties on Chinese electric vehicles
Canada wants to impose customs duties on Chinese electric vehicles

Canadian authorities announced plans Monday to impose tariffs on electric vehicles and batteries made in China, following in the footsteps of the United States and the European Union to stem the increase in cheap imports from from China.

The Canadian automotive sector is “facing unfair competition from China’s intentional overcapacity policy, which undermines the ability of the Canadian electric vehicle sector to compete in domestic and global markets”declared Deputy Prime Minister and Minister of Finance, Chrystia Freeland during a press conference. “Chinese producers are intentionally generating global oversupply that harms electric vehicle producers around the world”she said.

A 30-day consultation with industry and unions will begin July 2 on potential actions such as an import surcharge on Chinese electric vehicles, making them ineligible for federal rebates, and restrictions on foreign investment. Chrystia Freeland pledged to take action “to level the playing field, to avoid oversupply and to prevent transits through Canada”whose automotive sector is integrated into that of the United States.

Accusations from the European Commission

The European Union announced in mid-June that it was ready to impose additional customs duties – which would go up to 38% – on Chinese imports of electric cars from July 4, if “discussions with the Chinese authorities did not result in an effective solution”. After nearly nine months of investigation, the European Commission accuses Beijing of having illegally favored its car manufacturers. China subsequently indicated that it reserved the right to lodge a complaint with the World Trade Organization (WTO).

In May, Beijing expressed its “strong disapproval” after the American decision to increase customs duties on its electric vehicles from 25% to 100%. This decision “will seriously affect the atmosphere of bilateral cooperation”, the Chinese authorities had said. The Canadian automotive sector produces more than 1.5 million vehicles each year and contributes 18 billion Canadian dollars (12.3 billion euros) to the Canadian economy, according to government data.

Ottawa built the nation’s supply chains for electric cars and batteries with tens of billions of dollars in subsidies and investments, including from Honda, Volkswagen and Stellantis. The only Chinese-made electric vehicles currently imported into Canada are Teslas.

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