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Canadian Prime Minister Justin Trudeau said he would mimic recent U.S. measures and impose a 100% tariff on imports of Chinese-made electric vehicles and a 25% tariff on Chinese steel and aluminum.
Trudeau said Canada imposed the EV tariffs because China “is not playing by the same rules as Canada,” the latest example of the United States and its allies taking action to challenge unfair economic practices.
“Actors like China have chosen to gain an unfair advantage in global markets,” Trudeau said at a cabinet meeting in Halifax, Nova Scotia.
The announcement came a day after U.S. National Security Advisor Jake Sullivan met with the Canadian prime minister in Canada and urged the Canadian government to follow the U.S. lead in imposing tariffs. Sullivan will stop in Canada on his way to China, where he is due to meet with Chinese Foreign Minister Wang Yi.
Since President Joe Biden took office in 2021, his administration has invested heavily in persuading U.S. allies to take steps in concert with the U.S. to counter China. Speaking in Canada on Sunday, Sullivan said a “united front” would benefit the U.S. and its partners.
Canada’s finance ministry said the tariffs, which will take effect Oct. 1, will apply to Chinese-made EVs, including cars, trucks, buses and delivery vans. The steel and aluminum tariffs will take effect two weeks later.
The Canadian government will also begin a 30-day consultation to determine what other actions Ottawa needs to take, the ministry added, looking at batteries, semiconductors, solar products and critical minerals.
The Canadian tariffs follow similar measures by the United States on Chinese-made EVs and plans by the European Union to impose tariffs, albeit at lower rates than those in the U.S. and Canada. Washington and its allies worry that China’s dominance could lead to EVs flooding the global market.
The EU tariffs, due to be approved by the end of October, could range from 9 to 36.3 percent, on top of the existing 10 percent tariff.
Canada’s finance ministry said China’s “deliberate state-driven overcapacity policies and lack of robust labour and environmental standards” are endangering workers and businesses in the global EV industry and undermining Canada’s long-term economic prosperity.
“That’s why my government is taking decisive action to level the playing field, protect Canadian workers and match the steps taken by our 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 Canada’s move but said some countries were using protectionism and trade barriers to “protect underdeveloped industries.”
“China urges relevant countries to sincerely abide by market principles and international trade rules, and create a level playing field for enterprises from all countries,” embassy spokesman Liu Pengyu said.
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Auto manufacturing is one of Canada’s most important manufacturing industries, with factories concentrated around the Great Lakes region and supplying American consumers. According to the Canadian government, the industry directly employs about 120,000 people. Following the U.S. example, the Canadian government is also offering subsidies to stimulate demand for domestically produced EVs.
The tariffs came one month after Foreign Minister Melanie Joly visited China, the first by a Canadian foreign minister in seven years. Relations between the two countries plummeted after China detained Canadian citizens Michael Kovrig and Michael Spavor in 2018 and has not released them for more than three years. The measures are seen as retaliation for Canada’s detention of Huawei Chief Financial Officer Meng Wanzhou in response to a U.S. extradition request.
Additional reporting by Alice Hancock