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Canada on Monday said it would join the U.S. and Europe in slapping China-made electric vehicles with massive tariffs as firms like BYD BYDDY+2.01% look to expand.
The Canadian Department of Finance said its tariffs are designed to protect more than 125,000 — mostly unionized — auto manufacturing jobs, including those involved in the country’s EV supply chain. The department said China’s lack of labor and environmental standards threatens EV firms and workers and “undermine Canada’s long-term economic prosperity.”
Canada will impose a new 100% tariff on all Chinese-made EVs, and some hybrid passenger vehicles, on Oct. 1. That comes in addition to the existing 6.1% tariff on Chinese EVs made in China and imported into Canada.
A 25% tariff on steel and aluminum imports will go into effect on Oct. 15. Canada will also issue its second 30-day consultation period for measures affecting other sectors, including semiconductors, critical minerals, and battery parts.
“I think we all know that China is not playing by the same rules,” Canadian Prime Minister Justin Trudeau told reporters on Monday in Halifax, Nova Scotia, according to The New York Times. “What is important about this is we’re doing it in alignment and in parallel with other economies around the world.”
In May, President Joe Biden said the U.S. would issue a 100% tariff on Chinese EVs, along with smaller, but sizable, tariffs on imports of semiconductors, lithium-ion batteries, and other goods.The European Union last week revised its own planned tariffs on China-made EVs: Tesla’s vehicles made in China are set to be hit with a 9% tariff, while BYD BYDDY+2.01% will face taxes of 1%.
Canada’s action comes after BYD disclosed it had hired lobbyists to advise on entering the country’s market and met with Canadian dealers about setting up local dealerships, according to Automotive News. China’s biggest EV maker has expanded into dozens of countries in recent years and is building factories in Turkey, Hungary, and Brazil.
BYD’s general director of Mexico, Jorge Vallejo, told Reuters last week that the company has narrowed its list of possible locations for a Mexican factory to three states, each of which has offered “many benefits.” The company is already selling some cars in Mexico, although BYD America CEO Stella Li has said it has no plans to sell passenger EVs in the U.S.