Joe Biden is expected to unveil new tariffs on Chinese EVs. Here's what that could mean for the sector.
Business InsiderAPR 29 2024
Following the US and EU, Canadian Prime Minister Justin Trudeau announced on Monday that it will impose a 100% tax on Chinese-made EV imports. Furthermore, the country plans to impose a 25% tariff on steel and aluminum from China.
The move follows accusations from Canada and its Western allies that China is subsidizing its EV industry, giving its car manufacturers an unfair advantage. China has criticized the action as "trade protectionism" that "violates World Trade Organization rules."
At a Halifax press conference, Trudeau said Chinese EV overproduction and auto industry subsidies "require us to take action." The EV surtax, on top of 6.1% import tariffs, will apply to Chinese electric and hybrid passenger cars, trucks, buses, and delivery vans starting October 1.
Implementing harsh taxes on Chinese-made EV imports is the appropriate course of action since China will flood the country with artificially cheap EVs and undercut the domestic EV manufacturing industry, jeopardizing Canadian jobs. Matching US tariffs on Chinese imports, including at least a 100% tariff on Chinese EVs, will protect billions of dollars in public money and foreign investments in Canada's auto manufacturing sector. Canadian jobs are at risk.
Imposing high import tariffs on Chinese-made EVs is trade protectionism and violates WTO regulations. The tariff would hurt companies from both nations, Canadian consumers, and Canada's green transition and climate change mitigation. Canada should remedy this mistake since it would gravely damage the global trade system. China will take all necessary measures to protect Chinese companies's legal rights and interests.
Imposing high tariffs on Chinese EVs is not the right move for the environment. A 100% import tax on Chinese EVs will result in fewer affordable zero-emission cars, reduced competition, and increased climate pollution. A better move for Canada would be to consider adopting Europe's lower tariffs, ranging from 36% on cars from SAIC Motor, to 17% on BYDs, to 9% on Chinese-made Teslas.