Justin Trudeau says Canada will impose steep tariffs on Chinese electric cars and steel

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Canadian Prime Minister Justin Trudeau said Ottawa will impose a 100 percent tariff on Chinese electric vehicle imports and a 25 percent duty on Chinese steel and aluminum, in a move similar to recent U.S. measures.

Trudeau said Canada imposed tariffs on electric vehicles because China “didn’t play by the same rules.” It’s the latest example of the United States and its allies taking action to counter what they say are unfair economic practices.

“Actors like China have chosen to give themselves an unfair advantage in the global marketplace,” Trudeau said in Halifax, Nova Scotia, during a cabinet meeting.

The announcement came a day after US National Security Adviser Jake Sullivan met with Canada’s prime minister in Canada and urged Ottawa to follow Washington in imposing tariffs. Sullivan stopped in Canada on his way to China, where he will meet with the Canadian prime minister. Talks with Chinese Foreign Minister Wang Yi.

Since President Joe Biden took office in 2021, his administration has invested heavily in trying to persuade U.S. allies to take action with Washington to help confront China. Speaking in Canada on Sunday, Sullivan said a “united front” would benefit the United States and its partners.

The Canadian finance ministry said the tariffs, which will take effect Oct. 1, will apply to Chinese electric vehicles including passenger cars, trucks, buses and delivery vans. Tariffs on steel and aluminum will take effect two weeks later.

The Canadian government is also launching a 30-day consultation to identify other areas where Ottawa needs to take action. The consultations will include batteries, semiconductors, solar products and base metals, the ministry added.

The Canadian tariffs follow similar measures by the United States on Chinese electric cars and the European Union’s imposition of tariffs, albeit at lower rates than those imposed by the United States and Canada. Washington and its allies are concerned that China is ready to flood global markets with electric cars given its dominant position.

The EU tariffs, which are expected to be approved by the end of October, are expected to range from 9 to 36.3 percent on top of the current 10 percent.

“China’s deliberate, state-directed policy of overcapacity and lack of stringent labour and environmental standards” threatens workers and companies in the global electric vehicle industry and undermines Canada’s long-term economic prosperity, Canada’s finance ministry said.

“That’s why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and align with measures taken by major trading partners,” said Chrystia Freeland, Minister of Finance and Deputy Prime Minister.

The Chinese embassy in Washington declined to comment on the details of the Canadian move, but said some countries use protectionism and trade barriers “to protect… their underdeveloped industries.”

“China urges the relevant country to earnestly adhere to market principles and international trade rules, and create equal opportunities for enterprises from all countries,” said embassy spokesman Liu Bingyu.

The auto industry is one of Canada’s most important manufacturing sectors, with factories clustered around the Great Lakes region to supply consumers in the United States. The sector directly employs about 120,000 people, according to the Canadian government. Ottawa has followed the United States in offering subsidies designed to stimulate demand for domestically made electric vehicles.

The tariffs come a month after Melanie Joly visited China, the first by a Canadian foreign minister in seven years. Relations between the two countries deteriorated in 2018 after China detained two Canadian citizens — Michael Kovrig and Michael Spavor — and held them for more than three years. The move was seen as retaliation after Canada arrested Huawei’s chief financial officer, Meng Wanzhou, in response to an extradition request from the United States.

Additional reporting by Alice Hancock