Canada will impose a 100 percent import tax on Chinese electric cars

Canada will impose a 100 percent import tax on electric cars from China from October. The country therefore follows the example of the United States and the European Union, which increased the level of taxes before. The tax also applies to the American car brand Tesla, which makes cars not only in the US and Germany, but also in Shanghai.

By 2023, the number of electric cars from China imported into the Canadian port city of Vancouver was almost five times higher than the previous year. That happened after Tesla started shipping cars from its factory in Shanghai to Canada. Previously, Tesla cars were shipped to Canada from the California factory.

The US previously increased the import tax on cars made in China to 100 percent. The The EU increased the taxes from July, but chose to apply different rates. Electric cars from some Chinese brands are subject to a tax of almost 40 percent, while Tesla cars are subject to a lower rate of 9 percent.

Prime Minister Trudeau told the media that he made this decision to oppose China’s overproduction policy. According to the Prime Minister, China is “not enforcing the same rules” and is trying to flood the Canadian market with electric cars.

The EU, Canada and the US want China not to squeeze local businesses out of the market. The European Commission considers this competition to be unfair, as the Chinese government controls the industry would support with unfair subsidies.

In addition to import taxes on electric cars, Canada announced that it will increase the tax on steel from China to 25 percent. The United States also increased tariffs on other materials used in making electric cars. Canada is also considering such taxes on batteries and solar panels, for example.

A representative of the Canadian auto industry welcomed Trudeau’s decision and told Reuters he thought it was a good decision. China has yet to respond to Canada’s announcement.