Why U.S. tariffs on Chinese EVs could be a ‘tightrope’ walk for Canada
With the Joe Biden administration imposing massive new tariffs on Chinese-made electric vehicles, some experts argue that a American-style tariff may not make sense for Canada.
The U.S. move to quadruple import tariffs on Chinese-made EVs to 100 per cent came on May 14, amid a major push by North American manufacturers and governments to boost the electric vehicle supply chain for the coming decades.
U.S. President Joe Biden had cited unfair subsidies from the Chinese government to Chinese EV makers in announcing the import tariffs, which Prime Minister Justin Trudeau has said his government is “watching very closely.”
Canada currently imposes a six per cent tariff on Chinese-made vehicles, but the cars can qualify for up to $5,000 in federal rebates for EV purchases.
Trudeau along with Industry Minister François-Philippe Champagne and Trade Minister Mary Ng haven’t ruled out the possibility of similar tariffs, but none of them committed to following suit. The decision, economists said, is a complex one.
Moshe Lander, economics professor at Concordia University, told Global News, “If Canada wants to put tariffs on China, that’s within their control. They don’t have to do it just because the Americans are doing it.”
“In a lot of cases, we’ve been treating countries differently than the Americans because we see their strategic threat to us as different than the Americans,” Lander said.
Erik Johnson, senior economist at BMO Capital Markets, said Canada’s context is very different from a large economy like the United States.
He said China is Canada’s second largest trade partner and a back-and-forth over EV tariffs could hurt Canada in other sectors, like agriculture where China could impose retaliatory tariffs, and has done
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