Visitors check the China made BYD ATTO 3 at the IAA motor show in Munich, Germany, on Sept. 8, 2023.Matthias Schrader/The Associated Press
Ontario Premier Doug Ford is calling on the federal government to immediately bring in tariffs that match or exceed those recently imposed by the United States on Chinese imports of electric vehicles.
The Premier, joining a chorus of industry players, says the move is needed to protect EV and battery plants and the thousands of jobs that have been attracted here by the billions in taxpayer subsidies his government and Ottawa have announced in recent years. Those investments are threatened by what he says is a flood of cheap Chinese EVs.
“Taking every advantage of low labour standards and dirty energy, China is flooding the market with artificially cheap electric vehicles,” Mr. Ford said in a statement released Thursday. “Unless we act fast, we risk Ontario and Canadian jobs.”
Last month, U.S. President Joe Biden unveiled a huge round of tariff increases on Beijing to target what the U.S. government called “China’s unfair trade practices.” Mr. Biden made the announcement as he vies with Republican candidate Donald Trump to persuade voters which leader would be tougher on China, and amid concerns over Democratic hopes in several swing states with large numbers of manufacturing workers.
The Biden administration quadrupled tariffs on imports of Chinese EVs to 100 per cent from 25 per cent. Tariffs on both lithium-ion batteries and battery parts are rising to 25 per cent from 7.5 per cent. The U.S. also increased tariffs from zero to 25 per cent on a long list of critical minerals imported from China, including graphite, cobalt, aluminum, chromium, tantalum and ferronickel.
Canadian industry leaders have been calling for this country to match the U.S. trade measures. While Ottawa has been consulting with industry players, so far it has not taken any action, although it has sent signals that it eventually will.
Prime Minister Justin Trudeau, asked by a reporter on Thursday whether he would follow Mr. Ford’s advice, did not commit to implementing the tariffs but said further action is being considered.
“We’re watching closely what the Americans and other allies have done,” Mr. Trudeau said, adding that he discussed the issue at the recent G7 summit in Italy. “I can assure you we will continue to be there to protect Canadian workers and Canadian industry.”
Deputy Prime Minister Chrystia Freeland told The Globe and Mail in April that Canada and its allies were weighing taking trade action against China.
Katherine Cuplinskas, deputy director of communications for Ms. Freeland, wrote in an e-mail to The Globe on Thursday that China has an “intentional, state-directed policy” of flooding markets.
“We are actively considering next steps to counter Chinese oversupply,” she added.
Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association, said he believes the federal government will follow suit on the EV tariffs – and that he has been making the case to federal officials.
He said 80 per cent of the cars made in Canada are sold to Americans, meaning the Canadian jobs associated with those cars are in effect protected by the U.S. tariff that will insulate the American market from Chinese EVs.
“We don’t really have a choice here, as a good partner,” he said in an interview. “And it’s a question of when.”
He said the federal government may be considering how to tailor its response, given the effect Chinese retaliation could have on Canadian mining and other industries.
Mr. Volpe also said the auto industry believes Ottawa’s mandate to require 100 per cent EV sales by 2035 is not achievable without “wild amounts of Chinese cars and batteries.”
But he argues that hitting that goal should not be considered more important than preserving Canadian jobs.
“That’s a federal responsibility and not a provincial one,” he said of the EV-sales mandate. “And that’s why I think you see Doug Ford with clarity and the federal government still consulting.”
The European Union recently said it planned to almost quadruple tariffs on imports of Chinese EVs to as high as 38 per cent. The EU said if a resolution with China isn’t reached, the tariffs would take effect on July 4.
Sales of China-made EVs made by BYD Auto Co. Ltd are gaining in popularity in Europe and worldwide. BYD was the second-biggest global manufacturer of EVs in the first quarter, behind Tesla.