The Government of Canada intends to implement a 100% surtax on all Chinese-made EVs, effective October 1, 2024. This includes electric and certain hybrid passenger automobiles, trucks, buses, and delivery vans as well as fuel-cell vehicles. This follows similar announcements by the U.S. and EU.
This surtax will apply in addition to the Most-Favored Nation import tariff of 6.1% that currently applies to EVs produced in China and imported into Canada.
The Canadian Government also announced plans to impose a 25% duty on Chinese steel and aluminum to be implemented October 15.
According to the announcement by Chrystia Freeland, deputy prime minister and minister of finance, the move aims to level the playing field for Canadian workers and allow Canada’s EV industry and steel and aluminum producers to compete in domestic, North American and global markets.
“We are transforming Canada’s automotive sector to be a global leader in building the vehicles of tomorrow, but actors like China have chosen to give themselves an unfair advantage in the global marketplace,” said Canadian Prime Minister Justin Trudeau.
Since 2020, China has emerged as the largest manufacturer and exporter of EVs in the world, and its capacity continues to grow, as a result of policies such as extensive state subsidies and other non-market practices. In 2023, China’s annual EV exports totaled $47.2 billion, up from $0.2 billion in 2018.
According to a news release by Canada’s Department of Finance, the country’s auto manufacturing industry directly supports over 125,000 good-paying Canadian jobs, many of which are unionized. Similarly, Canada’s steel and aluminum sectors support over 130,000 jobs across the country.
“The auto supply chain in Canada supports nearly 550,000 direct and indirect jobs, and automotive is one of the country’s largest export industries,” said The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry. “That is why our government is committed to supporting a competitive and fair industry and to protecting Canadian jobs. This is about securing the fair, prosperous future Canadians deserve.”
In May, the U.S. said it would quadruple its tariffs on imports of Chinese EVs and certain hybrids to 100%. The EU followed with plans to impose duties of up to 36.3% on China-made EVs.
