Canada Hits Chinese Electric Cars with 100% Tariffs: What It Means for the Auto Industry

Canadian Prime Minister Justin Trudeau announced that Canada will impose a 100% tariff on electric vehicles (EVs) imported from China. This decision mirrors actions taken by the United States, which also aims to protect its market from a surge of Chinese EVs that are heavily subsidized by the Chinese government.

Trudeau accused China of unfair practices, including not following the same environmental and labor standards as other countries. In addition to the EV tariffs, Canada will impose a 25% surtax on Chinese steel and aluminum products.

This move comes as Canada invests billions into its own electric vehicle industry, trying to create a strong domestic supply chain for electric batteries. The government has attracted companies like Goodyear, Honda, and Volkswagen to invest in Canada through various subsidies.

Starting October 1, the 100% tariff will apply to Chinese electric and hybrid cars, trucks, buses, and delivery vans. Canada will also restrict EV incentives to vehicles made in countries with which it has free trade agreements, effectively excluding China.

China’s response to these tariffs was one of “strong dissatisfaction,” calling the move typical trade protectionism. Beijing warned that these tariffs could harm trade relations between the two countries and negatively impact Canadian consumers and businesses, as well as slow down Canada’s green energy transition.