On August 26, 2024, the Department of Finance Canada announced the country would introduce a 100% tariff on Chinese-made electric vehicles (EVs) and a 25% tariff on certain Chinese steel and aluminum products. The press release, citing “unfair, non-market policies and practices” by China coupled with a “lack of rigorous labour and environmental standards,” thus aligns with President Joe Biden’s May 2024 announcement proclaiming the United States—through an investigation pursuant to Section 301 of the Trade Act of 1974—would raise its tariff rates on Chinese EVs to 100% and on certain Chinese steel and aluminum products to 25% (see Bulletin of May 15, 2024). The Canadian tariffs on EVs will be imposed in addition to the 6.1% Most Favored Nation rate currently applied to EVs produced in China and will take effect October 1, 2024. The list of Chinese steel and aluminum products to be subject to the 25% tariff will be finalized on the same day—October 1, 2024—but will not experience the rate increase until October 15, 2024.
The press release confirms the tariff increases stemmed from recent discussions with “Canada’s international partners,” including fellow G7 members. However, the Canadian—and, for that matter, U.S.—measures still differ from recent tariffs levied by the European Union, which announced a 37.6% countervailing duty rate against Chinese EVs on July 4, 2024.
The press release adds that Canada will reassess the effectiveness of the tariffs in a year’s time. Meanwhile, “in the coming days,” Canada will launch a 30-day consultation period to gauge whether the country should modify its tariff rates on Chinese “batteries and battery parts, semiconductors, solar products, and critical minerals” as well.