While the European Union weighs potentially increasing tariffs on Chinese EVs amid competitive concerns, the U.S. has already done so – in fact, the Biden Administration recently quadrupled tariffs on Chinese EVs, as well as steel, aluminum, semiconductor chips, and various raw materials used in EV batteries. Amid concerns over unfair trade and inhumane labor practices, as well as potential national security concerns, it now seems as if another part of the world is considering taking action against Chinese EVs, too.
That country is Canada, which just announced that it is launching a 30-day consultation on potential policy responses to protect its automotive industry from unfair trade policies and practices, as well as prevent trade diversion. Canada notes that if it doesn’t take action against Chinese EVs, it could lead to “an exponential surge of imports that will adversely affect planned EV investments and the transformation of Canada’s automotive sector.”
“This growth is at risk of being undermined by the significant recent increase in exports of Chinese EVs to the Canadian and global markets, enabled by unfair support through China’s use of a broad range of non-market policies and practices,” it wrote of this decision. “These include, but are not limited to, pervasive subsidization, including of the supply chains of necessary components, problematic or non-existent labor and environmental standards, and other measures to artificially lower production costs, which is leading to significant overcapacity in Chinese EV production.”
Canada could take a variety of actions against Chinese EVs to prevent this from happening, including imposing a surtax on imported goods, excluding them from its EV incentive programs, denying Chinese companies the ability to invest in Canadian infrastructure, or various other steps that have yet to be determined.
Though most within the automotive realm supported the U.S. government’s decision to raise tariffs on Chinese EVs, a few analysts don’t believe that it will be enough to stop those vehicles from harming the American auto market. Regardless, Ford has been working on a low-cost EV platform to combat cheap Chinese EVs for over two years now, which was inspired by a trip that CEO Jim Farley took to the country some time ago.
