Canada is considering whether to impose import tariffs on Chinese-made electric vehicles (EVs) and will seek the public’s opinion about the idea, Deputy Prime Minister Chrystia Freeland said on Monday.
Freeland told reporters in Vaughan, Ontario, that Ottawa would open a 30-day consultation period on July 2 as to how Canada can respond. One option is a tariff on imports.
Freeland said the domestic car sector faced unfair competition from what she called China’s “state-directed policy of overcapacity”.
“Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada,” she said.
Canada’s Prime Minister Justin Trudeau in Ottawa on Wednesday. Photo: The Canadian Press via AP
The premier of Ontario, Canada’s most populous province and the main car-making centre, last week urged Ottawa to impose tariffs of at least 100 per cent on Chinese-made electric vehicles to protect jobs.
Canada has been under pressure to coordinate with Group of Seven (G7) allies on China trade policy. The White House last month unveiled plans to nearly quadruple US tariffs on Chinese-manufactured electric vehicles, up to a final rate of 102.5 per cent, while the European Union also plans to increase tariffs, taking those levies as high as 48 per cent on some vehicles.
Trudeau also faces tensions domestically. The Canadian car industry also been pushing him to hike tariffs in order to protect domestic jobs and wages, arguing that China’s EVs are cheaper because of much weaker labour standards.
With a joint review of Canada’s free trade agreement with the US and Mexico coming up in 2026, Trudeau’s government has been urged by business groups to ensure Canada is not seen as a side door for cheap Chinese goods into North America.
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Chinese-made electric vehicles face additional EU import tariffs of up to 38%
Chinese-made electric vehicles face additional EU import tariffs of up to 38%
Still, Trudeau has moved cautiously towards hiking tariffs on China. China is Canada’s second-largest trading partner, behind only the United States.
Some environmentalists also oppose the move, worrying that higher tariffs on EVs will only raise prices and hamper consumer adoption of cleaner technology.
Although the value of Chinese electric vehicles imported by Canada has surged recently, there has so far been little activity involving Chinese domestic vehicle makers. The vast majority of Canada’s EV imports from China are Tesla vehicles produced from its Shanghai factory.
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