Canada will impose a 100 percent import tax on Chinese electric cars

This article was last updated on August 27, 2024

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Canada will impose a 100 percent import tax on Chinese electric cars

Canada will charge a 100 percent import tax on electric cars from China from October. The country is thus following the example of the United States and the European Union, which previously increased the level of levies. The levy also applies to the American car brand Tesla, which produces cars not only in the US and Germany, but also in Shanghai.

In 2023, the number of electric cars from China imported into the Canadian port city of Vancouver was almost five times as high as the year before. That happened after Tesla started shipping cars from its Shanghai factory to Canada. Previously, Tesla cars were exported to Canada from the California factory.

The US previously increased the import tax on cars made in China to 100 percent. The EU increased the levies as of July, but chose to apply different rates. Electric cars from some Chinese brands are subject to a levy of almost 40 percent, while Tesla cars are subject to a lower rate of 9 percent.

Unfair competition

Prime Minister Trudeau told the press that he made this decision to counter China’s policy of overproducing. According to the Prime Minister, China “does not apply the same rules” and is trying to flood the Canadian market with electric cars.

The EU, Canada and the US want China not to squeeze local industries out of the market. The European Commission believes that this competition is unfair, because the Chinese government controls the industry would support with unfair subsidies.

In addition to the import duties on electric cars, Canada announced that it would increase the levy on steel from China to 25 percent. The United States also increased tariffs on other materials used in the production of electric cars. Canada is also considering such taxes on batteries and solar panels, for example.

A representative of the Canadian car industry welcomed Trudeau’s decision and told Reuters he thought it was a good decision. China has not yet responded to Canada’s announcement.