Canada has followed the US in slapping Chinese electric vehicles (EVs) with 100 per cent import tariffs, in a bid to protect North American manufacturing.
All electric cars imported from China will be hit by the new tariffs from October 1, 2024 – including those from US EV pioneer Tesla, which last year began delivering cars to Canada from Shanghai.
According to Reuters, more than 44,000 cars were exported from China to Vancouver in 2023 – a 460 per cent year-on-year jump, driven by Tesla imports.
Canada’s new tariffs are in keeping with those of its closest neighbour and biggest trading partner, the US.
100s of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
US President Joe Biden in May announced the nation would increase its tariff on some Chinese imports, including EVs, to 100 per cent. It also increased the tariffs on lithium-ion EV batteries from 7.5 per cent to 25 per cent.
In comments since echoed by Canadian Prime Minister Justin Trudeau, Mr Biden said “American workers can out-work and out-compete anyone as long as the competition is fair, but for too long it hasn’t been fair”.
“For years, the Chinese government has poured state money into Chinese companies across a whole range of industries: steel and aluminum, semiconductors, electric vehicles, solar panels — the industries of the future — and even critical health equipment, like gloves and masks.
“We’re not going to let China flood our market, making it impossible for American automakers to compete fairly.”
As it stands, the Polestar 2 is the only China-made electric car sold in the USA. It’ll be followed by the Lotus Eletre, which is built in Wuhan by parent company Geely.
Tesla builds cars in the US for US buyers, while Polestar will build the 3 SUV alongside the Volvo EX90 SUV in South Carolina.
As for Canada? Multimatic, the racing specialist which built the latest Ford GT road car, is headquartered in Ontario.
Ford, Stellantis, and General Motors each have three manufacturing plants in Canada, while Honda and Toyota each have one plant.
Chinese brands haven’t ruled out taking on the US market, despite the punitive tariffs.
BYD has expressed interest in opening a manufacturing facility in Mexico, which would allow it to cash in on a trade alliance with the USA and Canada.
The USA and Canada aren’t alone in fighting an influx of cheap Chinese electric cars; Europe is currently grappling with the same problem.
In June, the European Commission announced it would impose tariffs ranging from 17.4 per cent to a 38.1 per cent – on top of its existing 10 per cent tax on all imported vehicles – on EVs coming from China.
Tesla builds the European-delivered Model 3 in China, and was initially slugged with a 20.8 per cent tariff – though the same impost doesn’t apply to the Model Y (made in Germany), nor the Model S and X (made in America).
Following investigations by the European Union, Tesla has had its tariff reduced to 9.0 per cent – though this doesn’t include the existing 10 per cent import tax.
According to Reuters, Tesla’s tariff was reduced after the European Commission discovered the US brand had received fewer subsidies from the Chinese government than other EV makers based in the country.
Tesla wasn’t the only EV maker to have its tariff rate reduced, though it was by far the most significant beneficiary. BYD was initially hit with a 17.4 per cent tax rate, since reduced to 17.0 per cent.
MORE: Is a trade war brewing? Chinese carmakers want anti-Europe tariffs
MORE: China fires back in tariff war with Europe and US
MORE: Europe’s influx of affordable electric cars causes political flashpoint
MORE: Europe plays favourites in latest Chinese EV tariffs
MORE: Tariffs on Chinese EVs will make ‘everyone poorer’ – Germany
MORE: US to slug Chinese EVs with huge tariffs
