- Canada will implementing a 100% tax on electric vehicles imported from China.
After the U.S., Canada is also considering blocking Chinese electric vehicles from entering its market with a 100% tax. To level the playing field for domestic companies, the Canadian government has also implemented a 25% tax on Chinese steel and aluminum goods, as confirmed by Finance Minister Chrystia Freeland. The reasoning behind this move is that Chinese manufacturers exploit state-enforced excess production policies and have fewer safety and environmental regulations for their workers.
The new electric vehicle tax will go into effect on October 1, raising the current rate of 6.1% by 100%. The steel and aluminum taxes will commence two weeks afterwards. Additionally, the Canadian government plans to engage in consultations regarding other industries, including batteries, semiconductors, and solar products.
Similarly, the U.S. enacted a 100% tax on Chinese electric vehicles in May. As of now, there are scarcely any Chinese electric vehicles for sale in the U.S. and Canada. The sector is apprehensive that they cannot compete with cheaper Chinese vehicles.
Subsequently, in June, the EU Commission revealed its intentions to impose its own taxes. These proposals vary depending on the manufacturer, with proposed rates of 36.3% for SAIC, 17% for BYD, and 9% for vehicles manufactured by U.S. giant Tesla in China.
Given the current situation, Canada might face a scarcity of Chinese electric vehicles in its market due to the proposed 100% tax. This move aligns with the U.S.'s decision to impose a similar tax, potentially affecting the competitiveness of the electric vehicle sector in both North American countries.
