Minister Hints At Canada's Potential Tariffs On Chinese Electric Vehicles After U.S. Action

Canada's industry minister has indicated that Ottawa is exploring all options following the U.S. announcement of increased tariffs on Chinese electric vehicles and related goods.

François-Philippe Champagne, speaking on CBC News Network's Power & Politics, suggested that Canada might also consider imposing similar tariffs to safeguard its industry and workforce.

"We're keeping all possibilities open to protect our industry and workers," Champagne stated, emphasising Canada's collaboration with the United States on this matter.

President Joe Biden recently announced plans to impose new tariffs on various Chinese goods, including electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment. These tariffs will be phased in over three years, with those taking effect in 2024 targeting electric vehicles, solar cells, syringes, needles, steel, aluminum and more.

While there are currently few Chinese electric vehicles in the U.S., concerns have been raised about the potential influx of low-priced models into the market due to Chinese government subsidies.

Flavio Volpe, president of the Automotive Parts Manufacturers' Association, argued that Canada should implement similar trade levies in response to the U.S. decision, echoing sentiments shared by Brian Kingston, president of the Canadian Vehicle Manufacturers Association.

Champagne emphasised that Canada would not serve as a gateway for Chinese access to the North American electric vehicle market, reiterating Canada's commitment to alignment with U.S. policies.

Meanwhile, efforts are underway to attract investments from major automotive manufacturers to boost electric vehicle production in Canada. On the same day as the U.S. tariff announcement, Asahi Kasei Corp., in partnership with Honda, revealed plans to construct a USD 1.6-billion electric vehicle battery plant in Port Colborne, Ontario.

Volpe warned that domestic electric vehicle production could suffer if the Canadian market is flooded with cheaper Chinese products. He also suggested that China could retaliate by imposing export controls on critical minerals used in electric vehicle battery manufacturing.

Champagne stressed the importance of Canada strengthening its own critical mineral production. In a joint effort, Canada and the U.S. announced investments in critical mineral producers to enhance regional supplies. Natural Resources Canada and the U.S. Department of Defense are jointly investing in Fortune Minerals and Lomiko Metals Inc., focusing on projects involving bismuth, cobalt and graphite.