Canada Imposes High Tariffs on Chinese EVs to Counter Over-Capacity

Canada announced a 100% tariff on imports of Chinese electric vehicles and a 25% tariff on imported steel and aluminum from China. Prime Minister Justin Trudeau cited China's state-directed policy of over-capacity as the reason for the measures. The tariffs, effective from October 1, align with similar steps taken by the United States and European Union.

Canada, in a significant shift, announced on Monday it would impose a 100% tariff on imports of Chinese electric vehicles, following the footsteps of the United States and European Union. Additionally, a 25% tariff will be slapped on imported steel and aluminum from China. This measure encompasses all EVs shipped from China, including those made by Tesla, a Canadian government official revealed.

Prime Minister Justin Trudeau defended the move as a countermeasure to China's state-directed policy of over-capacity. 'I think we all know that China is not playing by the same rules,' he told journalists, emphasizing the coordinated effort with other global economies. These tariffs will take effect starting October 1, Trudeau added during a three-day cabinet meeting in Halifax, Nova Scotia.

The market responded quickly, with shares of Tesla dropping by 3%. The Chinese embassy in Ottawa has yet to comment on the new tariffs. Canada's action aims to position the country as a critical part of the global EV supply chain, under pressure from domestic industries to act against Chinese competition.

(With inputs from agencies.)