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Canada is looking at EV tariff policy after Biden’s move against China

Tan KW
Publish date: Sat, 18 May 2024, 07:26 PM
Tan KW
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Canada is examining whether it needs to raise tariffs on Chinese-made electric vehicles (EVs) after the White House announced major new levies on them, Trade Minister Mary Ng said.

“We are looking at this very carefully and we have an open dialogue with our American partners,” Ng said in a phone interview from Peru, where she’s attending meetings of the Asia-Pacific Economic Cooperation forum.

The Biden administration announced sweeping new tariffs against China this week, targeting semiconductors, solar cells and other products. The new US tariff on Chinese-manufactured EVs will take effect this year, with a final tariff rate of 102.5%, up from 27.5%.

Canada imposes a small tariff of about 6% on Chinese vehicles. Asked whether it may need to align its own tariffs with the US, Ng said again the government is speaking with US officials about the policy, “and we are absolutely looking at this”.

Ng stressed that Canada’s main focus is on producing EVs domestically. She pointed to agreements that Prime Minister Justin Trudeau’s government has signed with automakers such as Honda Motor Co and Volkswagen AG to make EVs, batteries or components in Ontario, Canada’s most populous province.

The country’s auto sector is highly integrated with US vehicle makers; parts and finished cars and trucks flow easily across the border between Ontario and key US manufacturing states such as Michigan and Ohio.

Chinese factories have a very small share of Canada’s auto market, but the country has recently witnessed a surge of imports of Chinese-made Tesla Inc models manufactured in Shanghai.

The number of cars arriving from China at the port of Vancouver rose more than fivefold last year, to about 44,400, after Elon Musk’s automaker started shipping Model Y vehicles from there.


  - Bloomberg


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