How will China handle Canada’s EV tariffs?

China is criticizing Canada over its recent decision to impose a 100% tariff on Chinese-made electric vehicles (EVs). This move by Canada, announced in late August 2024, is seen as an effort to protect its domestic EV industry from what it claims are unfair subsidies and overproduction by China, which undercut competitors with cheaper vehicles. Canada’s decision follows similar tariffs imposed by the United States earlier in the year.

China has responded strongly, accusing Canada of protectionism and violating global trade rules. Chinese officials argue that their EV industry’s success is due to innovation and market competition, not unfair practices. China has vowed to take necessary actions to safeguard its interests, though it has not specified what retaliatory measures it might take.

The tariffs are part of a broader strategy by Canada to protect its emerging EV sector, which includes additional tariffs on Chinese steel and aluminum. Canada is also considering extending these tariffs to other products such as batteries and critical minerals.
The decision by Canada to impose a 100% tariff on Chinese-made electric vehicles could have far-reaching economic and diplomatic consequences. Economically, the tariffs are likely to lead to higher prices for electric vehicles in Canada, which could slow the adoption of these vehicles among Canadian consumers. This move might limit the availability of more affordable EV options, particularly as Chinese manufacturers like BYD attempt to enter the Canadian market. Tesla, which manufactures some of its vehicles in China, may also face challenges unless it shifts production for the Canadian market to other facilities.

For the Canadian EV industry, these tariffs are designed to reduce competition from cheaper Chinese imports, potentially giving a boost to domestic manufacturers and leading to increased investment and job creation within Canada. However, the higher costs could also strain Canadian consumers and the broader automotive market, particularly if other countries respond with their own tariffs.

Diplomatically, this decision is likely to strain relations between Canada and China. Chinese officials have criticized the tariffs, arguing that they are a form of protectionism that violates global trade rules. China’s response could include retaliatory measures, which might further escalate tensions between the two countries. This development follows similar actions taken by the United States, suggesting a broader strategy among Western nations to curb China’s influence in the global EV market. As these tensions rise, the situation could complicate trade negotiations and economic relations not just between Canada and China, but also among other global players​.
China has recently been vocal about its stance on tariffs imposed by several countries, particularly focusing on the United States and the European Union. Beijing has criticized these nations for increasing tariffs on Chinese products, especially in sectors like electric vehicles (EVs), batteries, and other green technologies. The Chinese government argues that these tariffs are protectionist and violate the principles of fair trade, potentially harming global efforts towards green development.

In response to the U.S. decision to hike tariffs on Chinese EVs and related products, which took effect in August 2024, China has indicated that it will take necessary countermeasures. Although specific actions have not been detailed, China has emphasized its commitment to defending its interests and has not ruled out reciprocal tariff hikes or other trade restrictions.

The tension extends to the European Union, where China has responded to ongoing anti-subsidy investigations into its EV sector. Chinese officials have warned that such actions could disrupt the intertwined economic interests between China and the EU, particularly in the automotive sector, where European companies also benefit from Chinese exports.

Overall, China’s rhetoric suggests a readiness to engage in a broader trade conflict if necessary, while also highlighting the potential global implications of these tariff disputes on industries and climate goals​(

Sources: Global News, Global Times