Morning Market Brief
Canada is going to increase the tariffs on Chinese-made electric vehicles (EV), aluminum products and steel products. Prime Minister Justin Trudeau noted that Canada’s automotive sector in the EV space has a bright future and does not want it disrupted by EVs coming from China. Just a few months ago, the US also announced plans to raise tariffs on Chinese EVs.
- Canada plans on raising the tariffs on imports of Chinese-made EVs from 6.1% to 106.1% on October 1. Canada will also raise the tariffs on aluminum and steel products from China to 25% on October 15.
- Earlier in 2024, the US announced it would be increasing tariffs on Chinese-made EVs to 100%. President Joe Biden noted China’s government provides subsidies to EV makers, giving them an unfair competitive advantage. Canada’s finance minister also claimed different environmental and labour standards allow Chinese EV makers to charge lower prices.
- Chinese EV makers have not yet made a significant dent in Canada’s automotive market. The largest EV maker in China, BYD, set up a Canadian corporation in 2023. However, Canada’s imports of EVs made in China only surged higher over the past year after Tesla moved its manufacturing facility for Canadian sales from the US to China.
- The Canadian government hopes that Canada will become a global leader in building EVs. The government is aligning itself with the US in trying to keep production at home in this critical sector of the North American economy.
Upon Canada’s announcement that it plans to increase tariffs, China has pushed back claiming they might disrupt the global supply chain and relations between the two countries. Still, Canada believes that aligning itself with the US could help keep automotive production in the continent relatively robust.
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