Prime Minister Justin Trudeau announced on August 26 that Canada will implement a 100% tariff on all electric vehicles (EVs) made in China, effective October 1. This measure, which mirrors recent U.S. actions, aims to address what Trudeau described as unfair competition from state-subsidized Chinese vehicles.
The punitive tariff will effectively double the cost of importing Chinese-made EVs into Canada, likely passing most of the tax burden onto consumers. This move comes as part of a broader strategy to protect Canada’s emerging EV industry and to “level the playing field” for Canadian workers, Trudeau said during the federal cabinet retreat in Halifax.
The new tariff will affect electric and certain hybrid passenger vehicles, as well as trucks, buses, and delivery vans. Although Chinese EV brands like BYD have not yet made a significant impact on the Canadian market, the surge in imports from China—especially Tesla’s shift from U.S. to Shanghai production for Canadian sales—prompted the new policy.
The announcement also includes a 25% surtax on imports of steel and aluminum products from China, effective October 15. This additional measure targets China’s trade practices that Trudeau argues undermine Canadian industries and workers.
Trudeau’s decision follows a recent visit from Jake Sullivan, U.S. National Security Advisor, who advocated for a coordinated approach among allies regarding Chinese EVs. However, Canadian officials emphasize that these tariffs are not a direct response to U.S. pressure but a strategic move based on long-standing concerns about unfair trade practices and labor standards in China.
The tariffs are expected to face criticism from climate advocates who argue that higher costs for EVs could hinder Canada’s transition to a carbon-free future. These critics are concerned that increasing the cost of EVs, regardless of their origin, could impede progress toward emission reduction goals.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, supported the tariffs, stating they are crucial for maintaining a fair competitive environment and addressing concerns about the environmental standards of Chinese manufacturing.
