The Canadian government has announced a series of steep tariffs targeting Chinese-made electric vehicles (EVs), aluminum, and steel. Effective October 1, 2024, a 100% tariff will be imposed on Chinese-manufactured EVs, and a 25% tariff on Chinese steel and aluminum imports will follow on October 15.
These tariffs, announced by Prime Minister Justin Trudeau on Monday during a federal cabinet retreat in Halifax, align closely with recent actions taken by the United States, and are being put in place to counter what Trudeau describes as “China’s intentional, state-directed policy of over-capacity” and its disregard for global trade rules.
Trudeau emphasized however that the tariffs are not merely a reaction to US pressure but are part of a broader strategy to protect Canada’s critical industries.
“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 auto and metal workers. So, we’re taking action to address that,” Trudeau said. (via AP)
Impact of Canada’s Tariffs on Tesla
While the primary target of these tariffs is Chinese automakers, Tesla, which has been importing vehicles from its factory in Shanghai to Canada for more than a year, will also be subject to the 100% tariff. Tesla currently imports the Model Y, as well as the Model 3 Performance from China into Canada.
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The tariffs may force Tesla to shift its supply chain, or increase prices as a result, much like what it did in Europe when similar tariffs were implemented there.
The Canadian government is also considering extending tariffs to other Chinese-made goods, such as semiconductors, solar cells, batteries, and critical minerals. However, officials have indicated that any additional measures will be carefully weighed to avoid unintended consequences for domestic industries that rely on Chinese inputs.
