Canada has announced a 100% tariff on imports of Chinese-made electric vehicles (EVs), a move aligning with similar actions taken by the United States and the European Union. This decision also includes a 25% duty on Chinese steel and aluminum, marking a significant escalation in trade tensions between Canada and China.

The new tariffs will take effect on October 1 for EVs and October 15 for steel and aluminum. The Canadian government has justified these measures by accusing China of unfairly subsidizing its EV industry, which they argue gives Chinese car manufacturers an undue competitive advantage in the global market.

Canadian Prime Minister Justin Trudeau criticized China’s practices, stating, “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.”

China has condemned Canada’s tariffs as “trade protectionism” and claimed they violate World Trade Organization (WTO) rules. The Chinese embassy in Canada responded by emphasizing that China’s EV industry has thrived due to technological innovation, robust industrial supply chains, and competitive market practices, not government subsidies.

The tariffs will also affect electric vehicles produced by Tesla at its Shanghai factory. Tesla, already facing tariff challenges in Europe, may lobby the Canadian government for exemptions or consider shifting its Canadian imports to factories in the US or Europe. As Canada is Tesla’s sixth-largest market this year, the outcome of these negotiations could have significant implications for the company’s operations.

Earlier this year, the US imposed a 100% tariff on Chinese EVs, and the EU announced plans to impose duties up to 36.3% on the same imports. The EU recently reduced its additional tariff on Chinese-made Teslas following negotiations with Elon Musk’s company.

Chinese car brands are relatively new to the Canadian market, but companies like BYD have been making efforts to establish a presence. China remains the world’s largest EV manufacturer and has rapidly gained a substantial share of the global market. Meanwhile, Canada continues to pursue strategic partnerships with major European automakers as part of its strategy to enhance its role in the global EV industry.

By aparna

I am Aparna Sahu Investment Specialist and Financial Writer With 2 years of experience in the financial sector, Aparna  brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna  has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna  holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.

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