Canada wants to block electric cars from entering the market by imposing 100 percent tariffs on electric cars from China. The Canadian government announced 25 percent tariffs on Chinese steel and aluminum products.
As stressed by Finance Minister Chrystia Freeland, these measures are aimed at creating fair conditions for local industry. Chinese manufacturers benefited from, among other things, government-mandated high capacity and lax standards to protect workers and the environment, the government argues.
From October
The additional electric car charge is set to come into effect on October 1 and is in addition to the previous 6.1 percent. Steel and aluminum tariffs will follow two weeks later. The Canadian government wants to launch consultations on other industries such as batteries, semiconductors and solar products.
In May, the US government imposed 100 percent additional tariffs on electric cars from China. So far it has been impossible to buy Chinese electric vehicles in the US and Canada. There is a big concern in the industry that they will not be able to compete with cheaper cars from China.
The EU is still hesitant
The EU Commission followed suit in June with its own plans, however, offering different tariffs depending on the manufacturer. Currently, manufacturer SAIC should have 36.3 percent, BYD 17 percent and US group Tesla’s vehicles built in China nine percent.
However, it is not yet clear whether the tariffs will come. German car companies in particular are against it because they fear retaliatory sanctions in the Chinese market, which – at the moment – is crucial to their profits. Negotiations with Beijing are still ongoing. Either way, Brussels was clearly looking for a middle ground with the proposed measures and didn’t want a confrontation like the US – and now Canada too.
China threatens countermeasures
China immediately threatened Canada with countermeasures to impose tariffs. The Chinese Embassy in Canada said it will take “all necessary measures” to protect the rights and interests of Chinese companies.
“A 100 percent tariff on electric cars from China will affect trade and economic relations between China and Canada,” the statement said. The Canadian government is acting against the interests of Canadian consumers and businesses. Additionally, global efforts to combat climate change are being undermined.
Beijing’s Foreign Exchange
If the West’s trade conflict with China escalates, one of Beijing’s levers will be its dominance in the production of certain minerals critical to semiconductor production. According to the Financial Times, exports of germanium and gallium, needed not only for semiconductors but also for military communications equipment, were already restricted last year.
As a result, the price has already doubled. According to the Financial Times, the country produces 98 percent of the world’s supply of gallium and 60 percent of germanium.
China imposed export restrictions – which it justified on the grounds of “national security interests” – in response to export restrictions on advanced computer chips imposed by the United States.
