Western countries are taking the ‘if you can’t beat ’em, tax ’em’ approach to Chinese electric vehicle competition.
Driving the news: Starting in July, the EU is laying down extra tariffs on EVs made in China, as Chinese EVs are projected to make up a quarter of EV sales in Europe this year. The move comes just a month after the U.S. raised similar tariffs from 25% to 100%.
Why it matters: Like an F1 driver racing against a guy on a moped, China is lapping the field in EV production. The West is turning to tariffs as a last resort to stop Chinese EVs from overrunning the market, and Canada could be next in line to implement them.
- China has cultivated a dominant position, producing cheap yet well-made EVs, thanks to generous subsidies, stiff competition, and control of the critical mineral supply chain.
- The West needs to play some serious catch-up as tariffs will only hold off competition for so long — especially since some Chinese EVs are cheaper options even after tax.
What’s next: EVs from Chinese brands aren’t yet for sale in Canada, but that could change. Industry leader BYD already has a presence here, with an electric bus factory in Ontario.—QH