Canada to consider blocking Chinese investment in new factories to keep EVs at bay

Prime Minister Justin Trudeau’s government has published options it will consider for deterring Chinese-made electric vehicles from accessing the Canadian market, including putting tariffs on imported and blocking Chinese investment in new Canadian factories.

Trudeau’s government appears to only be considering tariffs on finished vehicles, based on the document released on Tuesday. The list of items that could see tariffs does not include batteries or battery components, for example.

The paper was released as part of the formal consultations Canada must conduct before imposing tariffs. Those consultations, announced by Finance Minister Chrystia Freeland last week, will seek feedback from stakeholders including trade unions and automotive industry groups, and will run until August 1.

Canada’s EV industry 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,” the consultation paper says.

The Chinese policies include “pervasive subsidisation, including of the supply chains of necessary components, problematic or non-existent labour and environmental standards, and other measures to artificially lower production costs, which is leading to significant overcapacity in Chinese EV production,” the document says.

The paper does not provide potential tariff rates and instead asks for feedback on what those may be for various vehicle classes. It also seeks comment on how tariffs might affect EV affordability in general.