Canada joins US on 100% import surtax for China-made EVs

Canada will implement a 100% surtax on all EVs made and imported from China from 1 October. Hybrids, plug-in hybrids, and fuel-cell vehicles are also included on the list.

The list is long and includes any vehicle with at least an “electric motor as the motor for propulsion,” whether a bus, a truck, or a passenger vehicle. Canadian Prime Minister Justin Trudeau said the tariffs were intended to counter China’s intentional overcapacity.

“We are transforming Canada’s automotive sector to be a global leader in building the vehicles of tomorrow,” he told reporters. “But actors like China have chosen to give themselves an unfair advantage in the global marketplace, compromising the security of our critical industries and displacing dedicated Canadian autos and metal workers.”

Canada most stringent?

China has criticized the move, saying Ottowas ignored the World Trade Organisation (WTO) rules. “The Canadian government insisted on announcing tariffs on Chinese electric vehicles in disregard of China’s repeated objections and solemn representations,” a spokesperson for the Chinese embassy in Canada said.

The tax hike in Canada, which the country first announced in June, follows similar moves by the US and EU. Washington announced in May that it would quadruple import taxes by 100%. The measure was to be effective in August, but some delays were encountered. Reuters says it might even be toned down in the coming days. The EU calls for additional import taxes for EVs from China up to 36%.

No exception for Tesla

What is strikingly different is that Canada does not make an exception for Tesla vehicles built in China. “It is a 100% surtax on all Chinese-made EVs. If companies currently making vehicles in China choose to move their production to a different country, they would no longer be captured by this tariff,” a Canadian government official told Reuters.

The EU agreed to only levy an additional 9% on Tesla vehicles from China, on top of the current import duties of 10% for all cars. The new duties also include a 25% surtax on steel and aluminum products. According to Trudeau, duties on chips and solar cells could follow.