Canada Preparing Tariffs on Chinese EVs Amid Pressure to Align with US and EU: Report

The Canadian government is reportedly gearing up to impose new tariffs on Chinese-made electric vehicles (EVs), following similar moves by the United States and the European Union.

Sources familiar with the matter that spoke with Bloomberg have indicated that the Canadian government is set to announce public consultations on the proposed tariffs, which could significantly impact Chinese EV exports to Canada. This follows the US’s recent decision to nearly quadruple tariffs on Chinese EVs to 102.5% and the EU’s plan to increase tariffs up to 48%.

The main concern driving these decisions is China’s overproduction of key goods, particularly battery-electric vehicles, which is seen as a strategic move to dominate global supply chains. Chinese companies like BYD have been rapidly expanding into international markets, prompting Western democracies to take protective measures.

Ontario Premier Doug Ford has been a vocal advocate for these tariffs, warning on Thursday that cheap Chinese EVs could undermine Ontario’s burgeoning EV manufacturing sector, which has received substantial government subsidies.

While Tesla does export the Model 3 Performance from Giga Shanghai to Canada, the primary concern lies with potential market saturation by low-cost Chinese brands.

ALSO READ: Tesla Requests Lower EU Tariffs on China-Made EVs

The Canadian auto industry, heavily intertwined with the US market, has been pushing for alignment on tariffs to maintain competitive parity as part of the United States-Mexico-Canada Agreement (USMCA).

Canada has invested heavily in ensuring a robust Canadian EV manufacturing sector, committing billions of dollars for new factories from major players like Volkswagen, Stellantis, and Honda.

Meanwhile, EV advocacy groups have voiced concerns about the impact of tariffs on EV affordability, arguing that higher costs as a result of the tariffs could slow consumer adoption.

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