Canada imposes 100% tariff on Chinese EVs, sparking global trade concerns

Canada announced on Monday that it will impose a 100% tariff on Chinese electric vehicles and a 25% tariff on Chinese steel and aluminum starting Oct. 1.

This move, following similar actions by the U.S. and EU, aims to address concerns over China’s state-directed over-capacity and trade practices. The tariffs will affect all EVs from China, including those made by Tesla, which saw its shares fall by 3.2% in response. Critics including China argue that the tariffs violate World Trade Organization rules and disrupt global trade. Responding to the new Canadian tariffs, analysts expect Tesla may shift its vehicle exports to Canada from the U.S., which could impact its profits due to higher production costs. Canada, facing pressure from domestic industries, is also considering additional tariffs on chips and solar cells and aims to enhance its role in the global EV supply chain.