Canada will implement a 100% tax on all China-made electric cars starting on Oct. 1, joining the U.S. and the EU in their efforts to protect homegrown automakers.
Driving the news: As Chinese EV makers continue to benefit from generous government subsidies, cheap labour, and low production costs to set outrageously low prices, Western countries are trying to slow the flow of cheap EVs that would undermine their auto industries.
- “I think we all know that China is not playing by the same rules,” Prime Minister Justin Trudeau told reporters on Monday, adding that the move is aligned with the U.S.
Why it matters: The Canadian government is also protecting the billions it’s spent to secure its position in the North American EV and battery supply chain recently, mostly by convincing automakers like Honda, Stellantis, Volkswagen, General Motors, and LG to set up shop.
Big picture: Canada will also tax steel and aluminum imports by 25%, and is exploring implementing another tax on strategic goods including semiconductors, solar cells, and lithium ion batteries, as the U.S. has done. Officials say China is likely to retaliate.—SB