TORONTO (AP) — The Canadian government announced Monday that it is imposing a 100% tariff on imports of Chinese-made electric vehicles, matching U.S. tariffs and following similar plans announced by the European Commission.
The announcement follows encouragement given by US National Security Adviser Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau and cabinet ministers on Sunday. Sullivan is leaving on his first visit to Beijing on Tuesday.
Trudeau said Canada would also impose 25% tariffs on Chinese steel and aluminum.
“Countries like China have chosen to give themselves an unfair advantage in the global marketplace,” he said.
There was no immediate reaction from China.
Chinese officials are expected to raise concerns about US tariffs with Sullivan as Beijing works to rebuild its economy after the COVID-19 pandemic. US President Joe Biden in May imposed new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment.
“The United States believes that a united front, coordinated approach to these issues is beneficial to all of us,” Sullivan told reporters on Sunday.
Biden has said Chinese government subsidies for electric vehicles and other consumer goods ensure that Chinese companies don’t have to make a profit, giving them an unfair advantage in global trade.
Chinese companies can sell electric vehicles for as little as $12,000. China's solar cell plants and steel and aluminum mills have enough capacity to meet most of the world's demand. Chinese officials argue that their production keeps prices low and will help spur the transition to a green economy.
“We're doing this in parallel, in concert with other economies around the world that recognize this is a challenge we all face,” Trudeau said of the new tariffs. “Unless we all want to fall into a race to the bottom, we have to stand up.”
Deputy Prime Minister Chrystia Freeland said Canada will also launch a 30-day consultation about potential tariffs on Chinese batteries, battery parts, semiconductors, critical minerals, metals and solar panels.
“China has a deliberate state-directed policy of overcapacity and oversupply, designed to cripple our own industry,” Freeland said. “We will not allow that to happen to our EV sector, which has shown very promising results.”
Currently the only Chinese electric vehicles imported into Canada are from Tesla, which are built at the company's Shanghai factory.
“When you think about our economic integration with the U.S., Canada has to keep up with the U.S. situation. More than 75% of our exports go to the U.S.,” said Guy Saint-Jacques, Canada's former ambassador to China. “It reflects the fear that the next president of the United States could be Donald Trump, and so they know we have to be very united in all of this.”
Saint-Jacques said Canada should expect retaliation from China in other industries as well, adding that barley and pork are also vulnerable because China can source them from other countries.
“China would like to send a message,” he said.