The federal government announced a 30-day consultation period to review the ethics of China’s electric vehicle industry, coming on the heels of mounting pressure from critics to apply tariffs on Chinese EV imports. Both the United States and Europe have already implemented trade controls on the sector.
“Canadian auto workers, and the auto sector … are facing unfair competition from China’s intentional, state-directed policy of overcapacity that is undermining Canada’s EV sector’s ability to compete in domestic and global markets,” Deputy Prime Minister Freeland told reporters in Vaughan, Ont. on Monday.
Freeland went on to say that the import of Chinese EVs “undermines EV producers around the world.”
“We are living in a world right now where China is taking advantage of the global economic system,” she added. “We know we need to defend our national interest and we will.”
While Freeland did not specify how the results of the consultation will affect Chinese imports exactly, she did say that “nothing is ruled out.”
“That includes the use of Section 53 … It grants very strong and very broad powers to the finance minister to act,” said Freeland.
Under Section 53 of the Customs tariff law, the government could potentially charge a surtax in addition to tariffs.
Ontario Premier Doug Ford called on the Trudeau government to impose import tariffs on Beijing similar to those already in place in the U.S. last week.
The U.S. announced tariffs on $18 billion in imported goods from China, including a quadrupling of taxes on EVs, bringing the duties that China would have to pay to do business up to over 100%.
China is also a major battery supplier for EVs, as well as battery components globally, accounting for 80% of all lithium-ion EV batteries worldwide in 2021.
“I’m calling on the federal government to immediately match or exceed U.S. tariffs on Chinese imports, including at least a 100% tariff on Chinese electric vehicles,” wrote Ford on X.
“Taking every advantage of low labour standards and dirty energy, China is flooding the market with artificially cheap electric vehicles. Unless we act fast, we risk Ontario and Canadian jobs.”
Conservative international trade critic Kyle Seeback released a statement on Monday, echoing his support for domestic manufacturing jobs.
“Our priority is to protect the jobs of Canadian workers. Canada should not allow the dumping of cheap Chinese products into our country that threaten Canadian manufacturing jobs,” reads the statement from Seeback.
Between the federal and provincial governments, over $52 billion in taxpayer dollars has already been spent on ensuring that EVs are manufactured domestically, according to the most recent Parliamentary Budget Officer’s report.
“Trudeau has failed to protect Canadian auto workers as evidenced by the fact that he has spent tens of billions of dollars subsidizing jobs for foreign replacement workers at EV battery plants, while securing no guarantees for Canadian union workers. He has also increased the cost of manufacturing and made Canada less competitive with his inflationary carbon tax,” continued Seeback.
“Common Sense Conservatives believe we should work with our close trading partners like the United States, so we can protect Canadian jobs and stand up for the working people of our country.”
Another concern that the consultations will aim to address are the possible threats to cyber and data security that may come with imported EVs from Beijing.
They will also look into potential restrictions on foreign investment.