The Canadian government announced a series of measures to protect the growing Canadian electric vehicle market and steel and aluminum producers against unfair threats from China.
The government will implement a 100 percent surtax on all Chinese-made EVs, effective Oct. 1. This includes electric and certain hybrid passenger automobiles, trucks, buses and delivery vans. This surtax will apply in addition to the Most-Favoured Nation import tariff of 6.1 per cent that currently applies to EVs produced in China and imported into Canada.
Additionally, the federal government intends to apply a 25 percent surtax on imports of steel and aluminum products from China, effective Oct. 15. This measure aims to protect Canada’s workers from China’s unfair trade policies and to prevent trade diversion resulting from recent actions taken by Canadian trading partners, said the country’s Deputy Deputy Prime Minister and Minister of Finance Chrystia Freeland.
The final list of goods subject to the surtaxes will be announced by Oct. 1, with the surtaxes taking effect on Oct. 15. The surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force.
Additionally, the Government of Canada will launch a second 30-day consultation concerning other sectors critical to Canada’s future prosperity, including batteries and battery parts, semiconductors, solar products and critical minerals. A consultation notice will be released in the coming days to help inform any further government action.
Fourth, the federal government is announcing its intention to limit eligibility for the Incentives for Zero-Emission Vehicles (iZEV), the Incentives for Medium and Heavy Duty Zero Emission Vehicles (iMHZEV) and the Zero Emission Vehicle Infrastructure Program (ZEVIP) to products made in countries which have negotiated free trade agreements with Canada.
The decision was largely applauded by the Aluminum Association and the Aluminum Extruders Council.
“[This] decision is another example of sensible, targeted trade policy that will help ensure that North America continues to be one of the best places on earth to make aluminum and aluminum products. Actions like those announced by Canada will ensure investments are fruitful – creating jobs and capturing anticipated demand growth in the coming decades,” said Charles Johnson, president and CEO of the Aluminum Association.
“While this is another good step in limiting the flood of unfairly traded materials into Canada, there must ultimately be a smelted and cast provision for all automotive products produced in North America to receive USMCA treatment,” said Jeff Henderson, president of the AEC. “A smelted and cast requirement on aluminum products will provide comprehensive relief to the entire value chain and support legitimate domestic manufacturing.”