TORONTO – Canada announced Monday that it is imposing 100% tariffs on imported Chinese-made cars, reaching the level of tariffs imposed by the United States. Western governments say the Chinese government subsidy gives Chinese companies an unfair advantage in the market.
The announcement came after encouragement from US national security adviser Jake Sullivan during a meeting on Sunday with Canadian Prime Minister Justin Trudeau and Canadian ministers. Mr Sullivan is expected to make his first visit to Beijing on Tuesday.
Canadian Prime Minister Trudeau said Canada will also impose 25% tariffs on Chinese steel and aluminum. “Actors like China have chosen to give themselves an unfair advantage in the global market,” he said.
There was no immediate response from China.
The only electric cars that are imported from China, at the moment, are Teslas, which are produced in a factory in Shanghai. US company Tesla can avoid this fee by shifting production for the Canadian market to factories in the United States or Germany.
Chinese auto firms do not yet play a role in the Canadian market. However, Chinese electric vehicle giant BYD opened a subsidiary in Canada last spring and has signaled its intention to enter the Canadian market possibly as early as next year.
Chinese officials are likely to raise their concerns about US tariffs with Mr Sullivan as Beijing continues to repair its economy after the COVID-19 pandemic. US President Joe Biden in May imposed new high tariffs on Chinese electric vehicles, advanced batteries, solar energy materials, steel, aluminum and medical equipment.
“The United States believes that a united front, a coordinated approach to these issues is in the best interest of all,” Mr. Sullivan told reporters on Sunday.
President Biden has said the Chinese government's subsidies for electric vehicles and other consumer goods are intended to give Chinese companies an unfair advantage in global trade.
Chinese firms can sell electric cars at a price of only 12 thousand dollars. China's solar panel plants and steel and aluminum plants have enough capacity to meet most of the world's demand. Chinese officials argue that it is their production that keeps prices low and that this would help with a transition to a green economy.
“We are doing this in coordination, in parallel, with other economies around the world that recognize that this is a challenge that we are all facing,” Mr. Trudeau said of the new tariffs. “If we don't want to come out last in the race, then we have to raise our voices.”
Deputy Prime Minister Chrystia Freeland said Canada will also launch a 30-day consultation on possible tariffs on Chinese batteries, battery parts, semiconductors, vital minerals, metals and solar panels.
“China has a deliberate state-led policy to supply products above market capacity to cripple our industry,” Ms Freeland said. “We simply will not allow this to happen to our electric car sector, which has shown promising signs.”
The only electric vehicles made in China that are currently imported into Canada are from the Tesla company, manufactured at the company's factory in Shanghai.
Canada “should have joined the position of the United States, given the economic integration we have with the United States; over 75% of our exports are to the United States,” said Guy Saint-Jacques, former Canadian ambassador to China.
Mr. Saint-Jacques said Canada could expect retaliation from China in other industries, adding that products such as barley and pork are at risk because China can take them from other countries.
“China will want to send a message,” he said.
