Canada to Impose 100% Tariff on Chinese Electric Vehicles, Including Teslas
Canada to impose 100% tariff on Chinese electric vehicles, including Teslas. Tariffs to be effective from October 1, aligning with global economies. Chinese embassy criticises move as "protectionist," urges adherence to WTO rules.
Additionally, a 25% tariff will be applied to imported steel and aluminum from China. This decision will impact all electric vehicles imported from China, including those manufactured by Tesla, a Canadian government official confirmed.
The move led to a 3.2% decrease in shares of Tesla, the world's most valuable automaker. The surge in Canadian imports of automobiles from China to Vancouver, the largest port in Canada, by 460% in 2023 prompted this decision. This increase coincided with Tesla commencing shipments of electric vehicles made in Shanghai to Canada.
Prime Minister Justin Trudeau highlighted that Canada's actions are in response to what he described as China's deliberate state-directed policy of over-capacity. Trudeau emphasised that the tariffs, effective from October 1, are part of a coordinated effort with other global economies.
In contrast, the Chinese embassy in Canada criticised the move as protectionist and a politically dominant act, accusing Canada of disregarding World Trade Organisation (WTO) regulations. The embassy spokesperson expressed concerns that the tariffs would disrupt economic and trade cooperation between the two countries, impacting Canadian consumers and businesses.
Despite being China's second-largest trading partner, Canada's decision to impose tariffs on Chinese electric vehicles has strained relations. The embassy urged Canada to adhere to WTO rules, rectify its actions, and avoid politicising economic matters.
Tesla, which has not disclosed its exports to Canada, may need to reconsider its logistics in response to the tariffs. Analysts anticipate that Tesla might adjust its operations to export vehicles to Canada from the United States to mitigate the impact of the tariffs.
The European Union recently imposed tariffs on Chinese-imported electric vehicles, including a 9% rate for Tesla, lower than the rates imposed on other Chinese EV imports. Ottawa aims to collaborate with the United States and allies to prevent customers worldwide from being disadvantaged by non-market practices, particularly those of China.
Furthermore, Ottawa is contemplating additional punitive measures, such as tariffs on chips and solar cells, to safeguard Canadian interests. The government's efforts align with positioning Canada as a crucial player in the global electric vehicle supply chain, responding to pressure from the domestic industry.
As the implementation of U.S. tariffs has been postponed until September, there is a possibility that the planned duties may undergo revisions this week.
Canada to impose 100% tariff on Chinese electric vehicles, including Teslas
Tariffs to be effective from October 1, aligning with global economies
Chinese embassy criticises move as "protectionist," urges adherence to WTO rules
Source: REUTERS